Energy Choice
                            

Matters

ESCO Alleges N.Y. PSC Show Cause Order, "Contains Numerous Factual Errors", Borrows Erroneous "Investigative" Language Describing A Separate ESCO

March 1, 2017

Email This Story
Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

In response to a show cause order issued by the New York PSC, in which the PSC alleged various violations of the Uniform Business Practices, including alleged slamming, Spark Energy, LLC and Spark Energy Gas, LLC alleged that the PSC's show cause order, "contains numerous factual errors and incorrectly attributes another ESCO’s conduct to Spark."

"The Order contains numerous factual errors. For example, the Order states that the NOAF [Notice of Apparent Failure] 'sought documentation from Spark related to 21 customer complaints' and that, in response, 'Spark provided TPV recordings for only 9 of those complaints.9 In fact, Spark did not provide any third-party verification ('TPV') recordings to Staff in response to the NOAF because, as discussed further below, the NOAF sought no such documentation from Spark," Spark said in its response

"The Order’s factual errors appear to be due to significant portions of Spark’s Order having been taken verbatim from a recent Order to Show Cause of another ESCO, only with Spark’s name substituted in place of the other ESCO. Specifically, almost the entire 'Investigative Section' in Spark’s Order mirrors the language contained in the Order to Show Cause issued against another ESCO on September 16, 2016 (the 'ESCO OTSC')," Spark alleged in its response

Spark in its response highlighted over a page worth of language in its show cause order which it alleged was copied from a prior show cause order nearly verbatim, merely substituting Spark's name in place of a prior ESCO and changing some discrete language, with such copied language alleging behavior which is not attributable to Spark

Click here for Spark's comparison of the language used in the show cause orders.

"The problem with this identical language is that the facts in the ESCO OTSC are not attributable to Spark. As a result, the Order erroneously attributes the conduct of another company to Spark," Spark said in its response

"Spark understands and recognizes that this is simply an administrative oversight by Staff and the Commission; nonetheless, the language and allegations in these sections are clearly not applicable to Spark and should be corrected in the administrative record," Spark said in its response

Putting aside those portions of the Order that are not attributable to Spark, the show cause order alleges that Spark slammed 17 customers between February and December 2016.

"This allegation is demonstrably incorrect," Spark said in its response

"Specifically, in conformance with the UBP, at the time of each sale, Spark’s marketer provided the customer with a copy of the sales agreement and ESCO Consumer Bill of Rights. Once the customer agreed to enroll with Spark, the customer confirmed his or her enrollment by completing an independent TPV. Further, Spark sent each customer a welcome letter, including an additional copy of the sales agreement, immediately after each customer’s enrollment," Spark said in its response

"Together, the TPVs and sales agreements demonstrate that Spark fully complied with the UBP in enrolling the customers in these 17 cases. In other words, none of these customers was slammed. After complying with and completing the foregoing steps consistent with the UBP requirements, however, it came to Spark’s attention (through the complaint process) that – despite their affirmative, specific representations to the contrary in the TPVs – the individuals completing the TPVs may not have been authorized representatives of the customers’ utility accounts," Spark said in its response

"Even though Spark had complied with the UBP and validly enrolled these customers and there was a good-faith dispute over switching authority, in an effort to quickly and amicably resolve these QRS complaints and maintain positive customer relationships, Spark returned all active customers to default utility service and re-rated their respective accounts. To be clear, after reviewing the sales documentation and TPVs, Spark determined that it was under no obligation to return these customers to the utility and re-rate them. It only did so to ensure that it maintained the highest standards of customer care," Spark said in its response

"Contrary to the incorrect allegations in the Order, during its routine response and resolution of these customer complaints, Spark provided Staff with a copy of the respective customer’s TPV and welcome package, including the sales agreement, for all but five of these customer enrollments. Based on the above, and as demonstrated by the referenced TPVs and welcome packages, Spark complied with the UBP in enrolling these 17 customers," Spark said in its response

Spark's response also outlined various compliance measures it has in place and that it undertook in response to the NOAFs, including terminating the use of a vendor associated with complaints and terminating an employee who did not follow Spark's policy to ensure timely customer refunds, and additional measures it will put in place

Among new measures, Spark said that it will hire a dedicated compliance manager who will oversee Spark’s compliance activities, including -- in conjunction with two full-time analysts -- auditing Spark’s sales and marketing vendors across all marketing channels. Further, Spark’s compliance team is currently encompassed within its sales department. To better ensure autonomy and oversight of compliance issues, Spark is moving its compliance department to its existing legal/regulatory division. All compliance functions will be consolidated within this new department, which will directly report to Spark’s Assistant General Counsel.

Spark also derailed its vendor training and sales quality procedures, including a clawback payment for every enrollment found to be completed in a noncompliant manner

"Spark has identified specific areas of improvement and taken necessary measures to modify its processes and procedures accordingly and will continue to take proactive measures, where necessary, to ensure it is operating in full compliance with applicable laws and regulations in New York. Spark is committed to fully and cooperatively working with Staff and the Commission to address, and, where necessary, remedy the applicable issues identified in the NOAF and Order. To that end, as other ESCOs have done during the course of similar Commission proceedings, Spark is willing to meet with Staff, as necessary, to discuss these improved business practices and processes," Spark said in its response

James Denn, Public Information Officer for the PSC, said in a statement to EnergyChoiceMatters.com concerning Spark Energy's response, "We will review the arguments being presented, and will correct the record, if needed; but it doesn’t change the fact that Spark has admitted to slamming customers."

Providing background information, the Department of Public Service alleged that Spark admitted to slamming 17 customers. In addition, the Department said that it received 66 complaints from Spark customers after having sent Spark the notice of apparent failure. Further, the Department said that it received a total of 88 complaints against Spark in 2016.

Spark Energy provided the following statement to EnergyChoiceMatters.com: "We are fully committed to working with the New York State Public Service Commission to swiftly and positively resolve this matter. As noted in our response to the Order, Spark did not slam customers. Rather, Spark fully complied with applicable regulations when enrolling these customers, including providing them with a copy of the sales agreement and confirming their intent to switch to Spark by means of independent third-party verification. Although we complied with all applicable requirements, we acknowledge that there was a good-faith dispute between Spark and these customers regarding switching authority. As a result, in order to maintain the highest standards of customer satisfaction, Spark rerated and returned these customers to their respective utilities."

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Manager of Regulatory Affairs -- Retail Supplier
• NEW! -- Channel Manager, Sales -- Retail Supplier
• NEW! -- Business Development Professional -- Retail Supplier -- Houston
• NEW! -- Brand/Marketing/Channel Manager -- Retail Energy
• NEW! -- Commercial Sales B2B -- Retail Energy
• NEW! -- Senior Analyst -- Retail Energy -- Houston
• NEW! -- Manager of Billing Operations
• NEW! -- Implementation Manager -- Retail Energy -- Houston
• NEW! -- Marketing Associate -- Retail Supplier -- Houston
• NEW! -- Directors: Telemarketing or Broker Channel Management - Retail Electric Supplier -- Houston
• NEW! -- Analysts, Sales and Marketing - Retail Electric Supplier -- Houston
• NEW! -- Market Director -- Retail Energy
• NEW! -- Energy Business Development Professional
• NEW! -- Managers, Sales and Marketing - Retail Electric Supplier -- Houston
• NEW! -- Sales Associate -- Retail Energy