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Retail Supplier Would Pay $250,000 To Settle Alleged Overcharging

May 24, 2017

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

An initial decision from a Pennsylvania ALJ would approve a settlement between the Pennsylvania PUC's Bureau of Investigation and Enforcement (I&E or Complainant) and Clearview Electric, Inc. (Clearview or Respondent) under which Clearview would pay $250,000 in civil penalties to resolve alleged overcharging to customers under a variable rate plan

Clearview also already made applicable full refunds to customers, totaling over $105,000.

An I&E complaint had alleged that Clearview had issued a total of 10,351 invoices containing charges exceeding $0.179/kWh for customers enrolled in a capped variable pricing plan in the PECO Energy Company (PECO) and PPL Electric Utilities Company (PPL) service territories in February, March, and April 2014.

A proposed finding of fact in the initial decision states that the disclosure statement for the relevant Clearview variable rate pricing plan offered to residential and commercial electric customers in Pennsylvania from June 2010 to May 2013 provided that the customer would experience a variable rate that could range from 8.9 cents to 17.9 cents per kWh; therefore, the variable rate for electric generation service under this plan was capped at $0.179/kWh.

A proposed finding of fact in the initial decision states that Clearview billed 4,157 customers enrolled in the capped variable pricing plan a rate of $0.1899/kWh in February, March, and April 2014 invoices.

According to the initial decision, "Clearview’s overcharges affected 4,157 customers and totaled $105,225.64."

According to the initial decision, Clearview "acknowledged" the overbillings; however, it averred: 1) that the charges over the capped rate were due to administrative error; 2) that it had proactively and promptly refunded $105,225.64 to the affected customers; and 3) that it had placed parameters on the capped customers’ accounts to prevent future overbillings.

A proposed finding of fact in the initial decision states that the affected Clearview customers paid an average of $25.31, over the course of a three-month period, more than what they would have paid if Clearview had charged them a rate of 17.9 cents per kWh.

Between July 17, 2014 and August 5, 2014, Clearview mailed letters to 905 former customers notifying them of the overpayment and enclosing a refund check. Between July 15, 2014 and August 31, 2014, Clearview mailed letters to 3,252 existing customers notifying them of the overpayment and indicating that credits would be applied to the supply portion of their bills.

The original I&E complaint had alleged that 10,351 violations of 52 Pa. Code § 54.4(a) occurred (reflecting multiple bills per customer), and had sought the imposition of a civil penalty in the amount of $125 per violation for a total civil penalty of $1.3 million.

Under the settlement with I&E, Clearview is to pay $250,000 in civil penalties, with the settlement also noting that $105,000 in full customer refunds has already been issued. Clearview is to also submit quarterly complaint and billing error reports to PUC Staff

Clearview does not admit any wrongdoing.

The ALJ recommended approval of the settlement stating, "Although the Company admits no wrongdoing, the size of the refund amount of $105,225 indicates overbilling involving 4,157 customers. This is not an “isolated incident,” another issue to be considered when analyzing this factor. Nonetheless, I believe that this fact should not be a barrier to the approval of the settlement in this case. As this factor recognizes that frequent and recurrent violations may result in a higher penalty, I believe that the full total refund size of $105,225.64, coupled with the civil penalty of $250,000, and reporting requirements to I&E over the next two years is reasonable and in the public interest based on the record developed in this proceeding. Clearview is advised, however, that further violations of the Public Utility Code or a Commission Order or regulation will likely warrant increasingly higher penalties up to and including license revocation. At this time, however, I believe the settlement is in the public interest and should be adopted in its entirety."

Docket C-2016-2543592

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