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PUC Considers $30,000 Settlement With Retail Supplier

March 2, 2018

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

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The Pennsylvania Public Utility Commission has issued for public comment, prior to final consideration and disposition, a proposed Joint Settlement Petition (Settlement) filed on April 6, 2017, by the Commission’s Bureau of Investigation and Enforcement (I&E) and American Power & Gas of Pennsylvania, LLC (AP&G or Company) (collectively, the Parties), with respect to an Informal Investigation conducted by I&E.

As stated in the PUC's order noticing the settlement for comment, "This matter concerns an informal investigation initiated by I&E regarding AP&G’s marketing practices as an electric generation supplier (EGS) in Pennsylvania. By letter dated February 17, 2016 (Investigation Letter), I&E instituted an investigation of AP&G, after receiving information provided by the Commission’s Bureau of Consumer Services (BCS) and the Office of Competitive Market Oversight (OCMO) about allegations that AP&G engaged in deceptive marketing practices by misrepresenting the Company’s status as an EGS and its purpose, speaking to individuals who lacked authority to enroll accounts, and engaging in questionable marketing practices in 2015."

As stated in the PUC's order noticing the settlement for comment, "I&E initiated the informal investigation of AP&G after being notified about allegations of deceptive marketing practices that were received from a variety of sources, including customers, an EGS broker, and an electric distribution company (EDC). One of the allegations forwarded by OCMO involved a phone call on August 25, 2015, between a sales agent acting on behalf of AP&G and a government distribution service customer of PECO. The sales agent allegedly failed to identify himself as being associated with AP&G and misled an administrative assistant of a government entity into verifying various account numbers, service addresses and rates that appeared on utility bills. The administrative assistant also asserted in part that she told the sales agent about her inability to make any decisions regarding the electricity accounts but nonetheless completed the third-party verification (TPV) process. Settlement at 5."

As stated in the PUC's order noticing the settlement for comment, "In addition to the governmental customer incident, OCMO received similar allegations about AP&G from an EGS broker/marketer in August 2015. The EGS broker/marketer contended that four to five of his large governmental and commercial clients claimed that AP&G changed their electric generation service based on conversations between the Company’s sales agents and individuals not authorized by their employers to switch electric service."

As stated in the PUC's order noticing the settlement for comment, "In its investigation, I&E concluded that AP&G’s sales agents asked appropriate questions during the TPV process to obtain authorizations from or on behalf of the customer of record. According to I&E, there was no evidence that TPVs were falsified or doctored or that the Company enrolled customer accounts based on inadequate or questionable authorizations. I&E Statement in Support at 3."

As stated in the PUC's order noticing the settlement for comment, "In contrast, I&E determined that AP&G’s sales scripts, instructions to sales agents and audio recordings of the sales presentations were misleading. For example, I&E found that sales agents were directed not to identify AP&G upon first contact with a potential customer but were instructed to indicate that the call was about the utility account. I&E concluded that the Company’s sales agents were not told to inform residential customers that AP&G is independent of the customer’s EDC, as required under 52 Pa. Code § 111.8(b). Moreover, I&E found that some sales agents informed customers that they were entitled to a rate reduction as part of the state’s energy program and other agents failed to indicate that the Company’s rate was variable when first discussing prices. I&E also determined that AP&G directed sales agents to tell customers, near the beginning of phone calls, that they would receive a new low rate starting with the next billing cycle. I&E considered such communication aggressive because it may lead some customers to believe they did not have options. I&E Statement in Support at 3."

Pursuant to the proposed Settlement, AP&G will pay a civil penalty of $30,000.

Furthermore, as stated in the PUC's order noticing the settlement for comment, "The Settlement acknowledges that the Company has since revised its marketing practices, including modifying sales materials, policies, and procedures related to marketing its EGS service to potential customers. Additionally, the Company commits to complying with 52 Pa. Code § 57.175 (relating to persons authorized to act on behalf of a customer), and will not enter into a sales agreement or change the commodity provider for any consumer that is not personally accepted by the EDC customer of record. The Settlement also requires the Company’s TPV to continue to require affirmative representation by the person consenting to the change that the person is either the EDC customer of record or has been authorized by the customer of record to act on behalf of the customer. In the absence of such a confirmation, the Settlement continues, AP&G shall not proceed with enrollment. Settlement at 14."

Docket M-2017-2508002

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