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Regulator Issues Show Cause Orders To Two Retail Suppliers, Opens Investigation Of Marketing Practices

Alleges Misuse Of Utility Logo

Alleges One Supplier Conducted TPVs With Sales Agent On Call

Customer Complaint Alleges One Supplier Used Deceased Husband As Authorization To Enroll For Service

October 26, 2018

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

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Note: This story was first published on Oct. 26 with an alert to our email subscribers

The Illinois Commerce Commission issued separate orders directing two retail electric suppliers to show cause why they should not be found to have violated various retail electric marketing rules, and show why they should not be subject to penalties such as license revocation, as more fully detailed below:

National Gas & Electric ("NG&E")

The Illinois Commerce Commission issued an order opening an investigation of National Gas & Electric, LLC's ("NG&E"), "customer sales, solicitation, marketing and enrollment practices, policies, procedures and materials[.]"

The ICC in its order summarized allegations contained in a report from ICC Staff. The ICC in its order said, "Staff states in its Staff Report that it has obtained information which leads it to conclude that NG&E has, in the course of marketing and soliciting sales of NG&E’s electric power and energy services, violated 83 Ill. Adm. Code 412.105 by using the name of a utility, the Commonwealth Edison Company (ComEd) in a deceptive or misleading manner; violated 83 Ill. Adm. Code 412.110 by failing to make the disclosures required by that Section at the beginning of a form retail contract; violated 83 Ill. Adm. Code 412.115, by using a uniform Disclosure Statement that fails to make required disclosures; violated 83 Ill. Adm. Code 412.130 (a) by its agents, employees or representatives failing to identify themselves as representatives of NG&E during telemarketing solicitations; violated 83 Ill. Adm. Code 412.130 (c) by its agents, employees or representatives failing to disclose minimum contract terms and conditions in the course of telemarketing solicitations; violated 83 Ill. Adm. Code 412.130 (e), by its employees, agents or representatives failing to drop off marketing solicitation calls during third party verification of enrollment, and by failing to obtain a clear acknowledgement [sic] that each customer understands the disclosure of terms and conditions during the third-party verification as require under 83 Ill. Adm. Code 412.130(e); violated 83 Ill. Adm. Code 412.130 (g), by its employees, agents or representatives continuing to market to customers who requested that NG&E refrain from further marketing; violated 83 Ill. Adm. Code 412.170(c) by using false, misleading, materially inaccurate and otherwise deceptive language in soliciting or providing services in that its employees, agents or representatives stated or represented to customers that their current electric supplier was no longer in business or otherwise unable to provide service to such customers, when this was not the case; further violated 83 Ill. Adm. Code 412.170(c) by NG&E employees, agents or representatives implying or conducting themselves in a manner calculated to lead customers to believe that such NG&E employees, agents or representatives were representatives of or affiliated with a public utility, namely ComEd; violated 83 Ill. Adm. Code 412.170(d) by its employees, agents or representatives obtaining customers’ account numbers before the customers agreed, assented to enroll, or where the customers did not affirmatively enroll; violated 83 Ill. Adm. Code 412.170(e) by failing to certify to the Commission that agents engaged in sales and marketing to Illinois consumers on behalf of NG&E have been properly trained on 83 Ill. Adm. Code Part 412, also in violation of Part 412; violated 83 Ill. Adm. Code 412.170(g) by failing to monitor marketing and sales activities to ensure that its RES agents are providing accurate and complete information and complying with all laws and regulations; violated 83 Ill. Adm. Code 412.210(b) failing to rescind the enrollment of one or more customers who made timely requests to rescind; and violated Section 16-115A of the Act in that employees, agents or representatives have enrolled customers without verifiable authorization."

In the Staff report, Staff alleged, "NG&E agent representatives or employees utilized ComEd’s name repeatedly in a deceptive or misleading manner while failing to identify themselves as representatives of NG&E thereby violating 83 III. Adm. Code Part 412.105(b)."

In the Staff report, Staff alleged, "In the course of marketing and solicitation activities, and upon dates after May 1, 2018, NG&E employees, agents, or representatives failed to identify themselves as representatives of NG&E. NG&E agents failed to provide their agent names and identification numbers, and throughout sales calls, made no statement or reference to the fact that they represented an independent seller of electric power and energy service certified by the ICC, namely NG&E. NG&E agents, as stated above, referred to the name of ComEd numerous times throughout sales calls with little or no specific reference to NG&E and its role as an independent seller, in each case violating 83 III. Adm. Code 412.130(a)."

In the Staff report, Staff alleged, "In the course of marketing and solicitation activities, and upon dates after May 1, 2018, NG&E employees, agents, or representatives have sought to enroll and have enrolled customers through telemarketing sales without verbally presenting one, some or all the disclosures required by 83 III. Adm. Code 41 2.130(c), thus violating 83 III. Adm. Code 412.130(c)."

In the Staff report, Staff alleged, "upon dates after May 1, 2018, NG&E employees, agents or representatives enrolling customers by telemarketing have remained on calls during third party verifications which occurred after the sales calls."

In the Staff report, Staff alleged, "In the course of marketing and solicitation activities, and upon dates after May 1, 2018, NG&E employees, agents or representatives have stated or represented to customers that their current electric supplier was no longer in business or otherwise unable to provide service to such customer and that the customer must choose another supplier, when in truth and fact this was not the case."

In the Staff report, Staff alleged, "upon dates after May 1, 2018, NG&E employees, agents or representatives have recorded customers’ account numbers before such customers agreed or assented to enroll with NG&E. In at least one instance, at the beginning of a telemarketing call, the NG&E employee, agent or representative gave his name and the name of NG&E. The NG&E employee, agent or representative asked the customer if she received energy assistance. When she said she did not, the marketer congratulated her on being eligible for the new rate. The marketer asked her to read her ComEd account number. She complied and at his request provided her name and address. Then the marketer congratulated her again and told her that NG&E would now be her supplier, when such customer had given no affirmative assent to enrollment with NG&E. In situations where an NG&E employee, agent or representative induced a customer to provide his or her account number along with his or her name and address without obtaining affirmative assent to enrollment with NG&E as his or her supplier, the NG&E employee, agent or representative conducted the remainder of the solicitation in a manner that assumed the customer wished to be enrolled with NG&E, regardless of whether the customer did anything to actually assent to enrollment, and in some cases despite the customer’s outright refusal to be enrolled."

In the Staff report, Staff alleged, "In the course of marketing and solicitation activities, and upon dates after May 1, 2018, NG&E employees, agents or representatives have failed to obtain verifiable authorization before the customer is switched to NG&E. Information in the possession of Consumer Services Division includes a complaint from a woman who asserts that her husband did not and could not have authorized a switch to NG&E since at the time of the alleged telemarketing call and TPV he had been deceased for more than two years. Neither the sales call nor the TPV provide verifiable authorization of the switch to NG&E."

The ICC in its order found that, "that National Gas & Electric, LLC should be directed to appear at the offices of the Commission at the time and date specified by the Administrative Law Judge assigned to this proceeding to adduce evidence whether respondent [NG&E] has violated the provisions of 83 Ill. Adm. Code Part 412 as set forth herein and in the Staff Report, to show cause why the Commission should not order NG&E to cease and desist from, or correct, the violation(s) of or non-conformance with 83 Ill. Adm. Code Part 412 described above; impose financial penalties upon NG&E; or issue an order altering, modifying, revoking or suspending NG&E’s certificate of service authority."

The ICC in its order found that, "proceedings should be initiated to investigate National Gas & Electric, LLC’s customer sales, solicitation, marketing and enrollment practices, policies, procedures and materials to ascertain whether National Gas & Electric, LLC, is in further violation of 83 Ill. Adm. Code Part 412."

Docket No. 18-1653

Star Energy Partners ("Star")

The Illinois Commerce Commission today issued a written order opening an, "investigation of Star Energy Partners, LLC’s customer sales, solicitation, marketing and enrollment practices, policies, practices and materials."

The ICC in its order summarized allegations contained in a report from ICC Staff. The ICC in its order said, "Staff states in its Staff Report that it has obtained information which leads it to conclude that Star has, in the course of marketing and soliciting sales of Star’s electric power and energy services, violated 83 Ill. Adm. Code 412.105(a) by using the logotype of the Commonwealth Edison Company ('ComEd'), an electric utility, in marketing materials; violated 83 Ill. Adm. Code 412.105(b) by using ComEd’s name in marketing materials in a deceptive and misleading manner which implies or is otherwise calculated to lead customers to believe that Star is a partner of, an agent of, soliciting on behalf of, or otherwise affiliated with ComEd; violated 83 Ill. Adm. Code 412.170(c) by using marketing materials that contain statements that are false, misleading, materially inaccurate or otherwise deceptive, in that they create the impression that certain Star offerings are provided in partnership or affiliation with ComEd; violated 83 Ill. Adm. Code 412.110 by failing to make the disclosures required by that Section at the beginning of a form retail contract; violated 83 Ill. Adm. Code 412.110(d) by charging a daily service fee and failing to disclose the estimated total bill for electric service using sample monthly usage levels of 500, 1,000 and 1,500 kWh; and violated 83 Ill. Adm. Code 412.170(e) by failing or refusing to provide any certification to the Commission showing that any of its agents completed the training program prior to an agent being eligible to market or sell electricity in Illinois. The Commission further finds that, based on the matters described in the Staff Report, proceedings should be initiated to investigate Star’s sales, solicitation and marketing practices, policies and procedures."

The Staff report more specifically alleged "In the course of [its] marketing and solicitation activities, and upon dates after May 1, 2018, Star employees, agents or representatives have, in the course of marketing and soliciting sales of Star’s electric power and energy services, shown to customers, in either electronic or written form, a document which prominently bears the logotype, trademark or service mark of Star itself on the upper left side, and which also prominently bears the logotype, trademark or service mark of the Commonwealth Edison Company on the upper right side, so that the two logotypes, trademarks or service marks are immediately adjacent or in close proximity to one another, and are prominently displayed at the top of the document. Immediately below the two logotypes, trademarks or service marks, the documents bears in prominent typeface and placement, the statement or legend 'OUR PARTNERSHIP IN ENERGY[.]' Beneath this legend is a photograph of two persons wearing safety 'hard hats.' One of the persons illustrated carries what appear to be technical drawings, and points at a wind turbine electric generator. The other person carries what appears to be a tablet computer. The document further states that '[w]ithin the next few days, ComEd will reach out to you to confirm your switch to our Star Hybrid Advantage fixed-rate energy plan.' The document thereafter states that '[w]e’re taking care of all the details so you don’t have to worry about changing anything. You’ll still receive your bill from your existing utility company. Only now, you’ll get the lowest energy rates available.'"

Staff alleged in its report that, "At all relevant times on and after May 1, 2018, 83 Ill. Adm. Code 412.105(a) has been in force and effect, and provides that: '[a]n RES shall not utilize the logo of a public utility in any manner.' By use of the logotype, trademark or service mark of the Commonwealth Edison Company, Star has committed a facial violation of 83 Ill. Adm. Code 412.105(a)."

In its order, the ICC found, "that Star Energy Partners should be directed to appear at the offices of the Commission at the time and date specified by the Administrative Law Judge assigned to this proceeding to adduce evidence whether respondent [Star] has violated the provisions of 83 Ill. Adm. Code Part 412 as set forth herein and in the Staff Report, to show cause why the Commission should not order Star to cease and desist from, or correct, the violation(s) of or non-conformance with 83 Ill. Adm. Code Part 412 described above; impose financial penalties upon Star; or issue an order altering, modifying, revoking or suspending Star’s certificate of service authority."

In its order, the ICC found that, "proceedings should be initiated to investigate Star Energy Partners, LLC’s customer sales, solicitation, marketing and enrollment practices, policies, practices and materials to ascertain whether Star Energy Partners, LLC, is in further violation of 83 Ill. Adm. Code Part 412."

Docket No. 18-1652

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