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Regulator Issues Show Cause Order To Retail Supplier, Opens Investigation of Sales, Marketing Practices

December 6, 2018

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

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The Illinois Commerce Commission initiated a proceeding to determine whether Great American Power, LLC (GA), "has violated 83 Ill. Adm. Code Part 412," and whether, if violations are found to have occurred, if GAP should be, "ordered to cease and desist from, or correct, the violation(s) of or non-conformance with 83 Ill. Adm. Code Part 412 described above; have financial penalties imposed upon it; or be subject to a Commission order altering, modifying, revoking or suspending its certificate of service authority."

The proceedings initiated by the ICC shall investigate GAP's sales, solicitation and marketing practices, policies and procedures.

Under the ICC's order, GAP was ordered, "to show cause, if any there be, why the Commission should not order GAP to cease and desist from, or correct, the violation(s) of or non-conformance with 83 Ill. Adm. Code Part 412 described [in a ICC Staff report of alleged violations]; impose financial penalties upon GAP; or issue an order altering, modifying, revoking or suspending GAP’s certificate of service authority."

As summarized by the ICC in its order, "Staff states in its Staff Report that it has obtained information which leads it to conclude that GAP has, in the course of marketing and soliciting sales of GAP’s electric power and energy services, violated 83 Ill. Adm. Code 412.170(e) by failing to comply with agent training and certification requirements; violated 412.320(c)(1)(C) by failing to timely investigate and advise CSD in writing of results of informal complaint investigations within the time prescribed by rule; violated 412.120(h) by failing to adhere to no-solicitation restrictions for in-person solicitations; violated 412.120(i) by failing to adhere to restrictions regarding multi-unit dwellings for in-person solicitations; and violated 412.170(g) by failing to properly monitor marketing and sales activities to ensure RES [retail electric supplier] agents are complying with all laws and regulations."

More specifically, Staff of the Consumer Services Division (CSD) and the Office of Retail Market Development (ORMD) ("Staff") said in a Staff report that, at all relevant times on and after May 1, 2018, 83 Ill. Adm. Code 412.120(h) has been in force and effect, and provides in relevant part that: "[t]he RES [retail electric supplier] agent shall not conduct any in-person solicitations at any building or premises where any sign, notice or declaration of any description whatsoever is posted that prohibits sales, marketing or solicitations."

Staff said that Section 412.120(i) provides in relevant part that: "[t]he RES agent shall obtain consent to enter multi-unit residential dwellings. Consent obtained to enter a multi-unit dwelling from one prospective customer or occupant of the dwelling shall not constitute consent to market to any other prospective customers in the dwelling without separate consent." Staff said that in-person sales agents are required to obtain consent before marketing to customers in multi-unit dwellings pursuant to Section 412.120(i).

In the report, Staff alleged that, "Staff is in possession of information that indicates GAP sales agents have entered multi-unit premises, without permission, to attempt to enroll, and in some cases enrolling, one or more of those buildings' residents. Staff has also received information that sales agents gained unpermitted access to a secure building managed by an Illinois County Housing Authority where a 'No Solicitation' sign is posted. Agents are prohibited from marketing in buildings with restrictions against solicitations pursuant to 412.120(h)."

In the report, Staff alleged that, "ICC Staff is in possession of information that indicates RES agents representing GAP have been marketing and/or selling electricity in the Illinois market without proper documentation of training and certification filed with the ICC."

Staff said that at all relevant times on and after May 1, 2018, 83 Ill. Adm. Code 412.170(e) has been in force and effect, and provides in relevant part that: "[a]ll RES [retail electric supplier] agents shall complete a training program that covers the applicable Sections of this Part. The RES shall document the training of its agents and provide a certification to the Commission showing that an agent completed the training program prior to an agent being, eligible to market or sell electricity in Illinois."

Staff said that "RES Agent" is defined in the "Definitions" Section of Part 412, in Section 412.10, and is defined as: "any employee, agent, independent contractor, consultant or other person who is engaged by the RES to solicit customers to purchase, enroll in or contract for electric power and energy service on behalf of an RES."

Staff further alleged in the report that a response from GAP to a September 2018 Notice of Apparent Violation (NOAV) indicates that, "GAP’s rule interpretation reflects a failure to properly evaluate, or a complete disregard, of the compliance requirements,."

Staff alleged in the report that GAP, in GAP's response to the NOAV, stated that, "it was our belief that while we are required to verify that the proper training was received by agents, the certification requirement was not applicable [to agents employed by third party vendors selling on our behalf]."

Staff said that, at all relevant times on and after May 1, 2018, 83 Ill. Adm. Code 412.170(g) has been in force and effect, and provides: "[e]ach RES shall monitor marketing and sales activities to ensure that its RES agents are providing accurate and complete information and complying with all laws and regulations."

Staff in the report alleged that, "Staff is in possession of information that indicates GAP has not been properly monitoring marketing and sales activities of its RES agents to ensure that they are providing accurate and complete information and complying with all laws and regulations. The information and allegations discussed throughout this Staff Report indicate that GAP has failed to properly monitor marketing and sales activities to ensure its RES agents are providing accurate and complete information and complying with all laws and regulations."

Staff said that at all relevant times on and after May 1, 2018, 83 Ill. Adm. Code 412.320(c)(1)(C) has been in force and effect and states: "[t]he RES shall investigate all informal complaints and advise the CSD in writing of the results of the investigation within 14 days after the informal complaint is forwarded to the RES."

Staff in its report alleged that, "ICC Staff is in possession of information that indicates GAP failed to timely investigate and advise CSD of the results of the investigations within the time prescribed by rule. Staff received a sudden high-volume number of informal complaints pertaining to GAP, which Staff sent on to GAP for resolution. However, GAP failed to timely investigate and advise CSD of the results of the investigations within 14 days as required by 83 III. Adm. Code 412.320(c)(1)(C)."

Docket No. 18-1773

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