Energy Choice
                            

Matters

Industry Group Seeks Investigation Of Retail Supplier's Trade Practices

Alleges Supplier Not Honoring Fixed Rates, Supplier Allegedly Cited Changing Market Conditions Which Made Contracts Unprofitable

February 12, 2018

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

The Connecticut Business & Industry Association ("CBIA"), in accordance with Connecticut General Statutes ("CGS") section 16-245t, submitted to the Connecticut PURA a complaint concerning the alleged business practices of Mint Energy, LLC

"CBIA requests PURA conduct an investigation of possible unfair or deceptive trade practices and to take action to prevent further unfair or deceptive trade practices by MINT," CBIA said in its petition

Mint Energy provided the following statement to ECM on Feb. 9: "Mint Energy has just this afternoon received the petition filed with the PURA, regarding differing interpretations of contractual terms between experienced business entities. Mint has always complied with all regulatory requirements, and looks forward to a swift resolution to this issue."

CBIA, a licensed aggregator, provides energy aggregation services to nearly 1,000 member-clients each year, working with Usource LLC

CBIA alleged, "In serving our customers for over eighteen years, we have never encountered any issue within this network of licensed suppliers that warranted registering a formal complaint with PURA. However, our experiences with MINT, and its continued mistreatment of our customers, necessitates this formal action."

CBIA alleged, "Between March and April 2017, CBIA/Usource placed eighty (80) CBIA member-clients into supply contracts with MINT. All the contracts were reviewed and countersigned by MINT and scheduled to take effect on Dec.1, 2017. The contracts specified a price of approximately $0.085/kWh."

CBIA alleged, "Between the time the contracts were finalize in April and the following November, many if not all of these customers were solicited by other energy suppliers with offers to provide electricity at competitive rates but, acting in good faith under their agreements with MINT, informed those suppliers they already had one year contracts with MINT starting in December, 2017."

CBIA alleged, "On November 7, 2017, less than thirty (30) days prior to the contract's implementation, MINT informed CBIA and Usource that they would not be able to honor sixty-five (65) of the eighty (80) contracts due to changes in the energy marketplace that would render those contracts unprofitable to MINT. As an alternative, MINT offered to renegotiate new contracts bumping the previously agreed upon rate of roughly $0.085/kWh to approximately $.011/kWh."

CBIA alleged, "CBIA and Usource immediately initiated dialogue with MINT voicing our strong objection to MINT's notice and explaining that this notice, coming seven (7) to eight (8) months after the contracts were created and less than thirty (30) days prior to their implementation date, was unfair and untenable to CBIA and our member-clients. MINT refused to relent in its position and insisted the contracts were terminated."

CBIA alleged, "With the financial well-being of our member-clients, as well as its own brand and reputation in immediate peril, CBIA reassigned staff and worked overtime in a desperate effort to contact our member-clients, explain the situation, apologize and attempt to find them a new supplier offering competitive pricing -- albeit above the pricing they had been relying on for at least seven months. CBIA and Usource mobilized staff at great expense to both organizations to identify a new supplier, create new enrollment processes, and enroll most of these customers back into new supply contracts with less favorable pricing due to market movement."

CBIA alleged, "These actions, necessitated by MINT's threatened contract cancellations, resulted in some hard-feelings towards CBIA by some member-clients, and even the loss of some members to CBIA."

CBIA alleged, "Additionally, without exception, customers that had relied on MINT's performing under the terms of the contract, were forced to pay higher energy prices -- prices that were not budgeted into their operational expenses nor their product purchase agreements with their customers. In fact, the total additional expense for all clients impacted by MINT's mass termination of contracts was approximately $313,400 for the contract terms. Accordingly, CBIA, and our member-clients all suffered significant financial injury due to MINT's unethical and oppressive business practices."

CBIA alleged, "MINT continued its oppressive and unfair business practices into December 2017 as well. On Monday, December 5, 2017 MINT contacted two member-clients already in active, fixed priced, 100% swing contracts with MINT, informing them they would not honor the contract price. Both customers were offered substantially higher pricing with non-disclosed early termination fees. When these customers decided to not accept the higher contract pricing, MINT terminated their contracts and returned them to the utility for supply, at a collective increase of over $13,000 above their contracted rate."

CBIA alleged, "On Tuesday, December 6, 2017, MINT contacted two other member-clients, both of which were in active MINT fixed priced contracts with 100% swing provisions, and accused those companies of violating the material change clause (MAC) in their contracts, offering them substantially higher contract pricing or an option to terminate the contract at a substantial early termination fee (approximately $10,000 and $15,000). MINT stated that the trigger of this MAC clause was due to a customer usage deviation of 15% in a one month period, an arbitrary number and time period not defined in the contract. In fact, going back to a September 29, 2016 email regarding material changes, MINT stated 'the MAC applies to intentional changes set in motion by the business that significantly impact usage patterns (e.g. opening or closing of a building, solar installations, etc.) that result in Mint Energy incurring additional material costs,' and that 'MAC is not invoked for normal fluctuations in usage related to weather.'"

CBIA alleged, "We reached out to these member-clients, who confirmed that no material changes in usage had in fact occurred as defined under the contract. Once again, these latest actions by MINT constitute unfair trade practices -- exacerbated by MINT falsely accusing the companies of breaching their contracts. The cost of the unwarranted contract rate increases (from $0.0860 to $0.1177, and $0.0785 to $0.0953) to these two customers totaled $84,538.68. As such, we believe that MINT's invocation of the MAC is an attempt to wrongfully extract money out of customers who in good faith signed MINT contracts that were later deemed to be unprofitable."

CBIA argued that CGS Subsection 16-245o(f)(2) requires contracts between suppliers and customers to describe under what circumstances, if any, the supplier may terminate the contract.

CBIA alleged that, "Such conditions are specified in paragraph M of the agreement. However, MINT inserted elsewhere in the contract [paragraph D], separate and apart from these specific termination circumstances, a clause MINT claims grants it the right to terminate the agreement 'either for cause, as specified elsewhere [paragraph M] of the [agreement], or for no cause by written notice given to Customer no later than five (5) business days prior to the expiration of the [contract].'" "CBIA believes the termination for no cause clause in paragraph D of the agreement renders the substance of paragraph M, defining the circumstances under which MINT is permitted to terminate the agreement as utterly meaningless -- as if it were not in the agreement at all. Thus, the contract on its face, violates both the substance and the intent of subsection 16-245o(f)(2)," CBIA alleged

"Further, MINT argues that by agreeing to a contract that includes the 'the termination for no cause clause', customers waived their right to rely upon the specific circumstances articulated in paragraph M, as required under CGS 16-245o(f)(2). However, subsection (j) of the same statute provides that 'any waiver of the provisions of [CGS 16-245o] by a customer of electric generation services shall be deemed void and unenforceable by the electric supplier. CBIA argues that the 'termination for no cause clause', is therefore void and unenforceable and that consequently, MINT violated the agreements by terminating the contracts in the absence of any circumstance articulated in paragraph M of the agreements being realized," CBIA alleged

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Commercial Energy Advisor
• NEW! -- Operations Manager -- Retail Supplier
• NEW! -- Business Development Manager - Texas, Retail Provider
• NEW! -- Business Development Manager - Northeastern US, Retail Supplier
• NEW! -- Senior or Principal Quantitative Research Analyst, Energy Commodity/Risk
• NEW! -- Operations Manager -- Retail Supplier
• NEW! -- Business Development Manager -- Retail Supplier -- Philadelphia
• Commercial Energy Advisor -- Dallas