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Retail Supplier Seeks Dismissal Of Petition Filed By Industry Trade Group Seeking Investigation Due To Changed Pricing

Retail Supplier Says Dispute Is Contractual, And Outside Jurisdiction of State Utility Regulator

Complaint Stems From Supplier Allegedly Seeking to Change Fixed Rates Due To Market Conditions

March 19, 2018

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

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Stating that its actions did not amount to deceptive or unfair trade practices, and that PURA lacks jurisdiction over non-residential contractual disputes, Mint Energy has moved that the Connecticut PURA close, without further action, a docket opened in response to a petition from the Connecticut Business & Industry Association (CBIA), which had sought an investigation into Mint Energy's trade practices, alleging that Mint's actions with regards to certain contracts violated certain of the Connecticut General Statutes.

As first reported by EnergyChoiceMatters.com (see details here), CBIA alleged that Mint has informed CBIA, which runs an affinity program, that Mint would not be able to honor pricing in 65 previously negotiated contracts, which had not yet begun service, due to changes in the energy marketplace that would render those contracts unprofitable to Mint. Additionally, CBIA alleged that Mint contacted two CBIA member-clients already in active, fixed priced, 100% swing contracts with Mint, informing them Mint would not honor the contract price.

CBIA contends that Mint’s actions: (i) constitute unfair trade practices within the meaning of Connecticut General Statutes section 42-110b under the so-called "cigarette rule"; and (ii) constitute unfair or deceptive trade practices within the meaning of Connecticut General Statutes section 42-110b because they violate Connecticut General Statutes section 16-245o(f)(2).

"However, there is no merit to CBIA’s allegations that Mint violated CUTPA," Mint said in a response filed at PURA

"To determine whether particular practices are unfair, Connecticut courts evaluate the practices pursuant to the Federal Trade Commission’s 'cigarette rule,'" Mint noted

"In Ramirez v. Health Net of the Northeast, Inc., the Connecticut Supreme Court held that, as a matter of law, action in accordance with the plain and unambiguous terms of an agreement does not run afoul of the second 'cigarette rule' criterion," Mint said

Further, Mint said that the Connecticut Supreme Court has found that, "[a]lthough there is a split of authority in the Superior Courts regarding what is necessary to establish a CUTPA claim for breach of contract, the vast majority of Superior Court decisions [conclude] that, absent allegations of sufficient aggravating circumstances, [a] simple breach of contract, even if intentional, does not amount to a violation of [CUTPA]."

"In the instant docket, CBIA’s allegations center on Mint’s exercise of its contractual rights. CBIA does not allege that Mint acted in contravention of its contractual rights nor does it allege additional aggravating circumstances. In fact, CBIA admits that the contracts at issue contained provisions for termination without cause. Further, while CBIA alleges that Mint attempted to renegotiate pricing in two contracts based on material change clauses, CBIA makes no allegation that Mint actually violated any provision in these contracts. Because, as CBIA itself admits, Mint acted within its contractual termination rights, Mint did not engage in unfair trade practices within the meaning of the 'cigarette rule.' Furthermore, even if Mint wrongfully terminated these contracts (which Mint vehemently disputes), Mint’s actions do not rise to the level of CUTPA violations," Mint said

"CBIA argues, without any legal support, that a provision in the contract allowing for termination, without cause renders meaningless a separate provision allowing for termination for certain specified causes and, therefore, essentially removes all termination provisions from the contract. Pursuant to Paragraph M, Mint could terminate the contracts with cause, and, pursuant to Paragraph D, Mint could terminate the contracts without cause. A termination without cause provision does not render a termination for cause provision superfluous. The provisions merely describe different circumstances under which termination is permissible," Mint said

"Fundamentally, the Petition deals with contract disputes between businesses. However, as discussed more fully below, the Authority does not have jurisdiction to address such disputes. Rather, contract disputes should be resolved in accordance with their dispute resolution provisions, including their choice of law, choice of forum, and arbitration provisions," Mint said

Mint noted that, "The Connecticut Supreme Court determined in Kleen Energy Systems, LLC v. Commissioner of Energy and Environmental Protection, that the Authority lacked jurisdiction to resolve a dispute over a contract that contained an arbitration clause, even though the case involved a dispute over a capacity contract whose form had been developed in a proceeding before the Authority. Once this contract was executed by private parties, the Authority was without jurisdiction to alter its decision approving the contract’s form."

"In this case, the contracts were not only executed by private parties, they were negotiated by those parties. As an administrative tribunal with only the authority granted it by statute, the Authority does not have jurisdiction over the contracts at issue in the instant docket. Like the Kleen Energy contract, Mint’s standard form contracts contain arbitration and choice of clauses to which the parties agreed. As a consequence, any disputes regarding executed contracts based on these forms must be addressed as provided in the contracts; not by the Authority," Mint said

Docket 18-02-05

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