Consumers' Counsel Seeks Rejection Of $675,000 Settlement Between Retail Supplier And PUC Staff

OCC Seeks Rescission Of Supplier's License, Greater Restitution To Customers

Opposes Use Of "Shopping Rewards" As Restitution Offset

October 2, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Office of the Ohio Consumers’ Counsel has filed testimony opposing a settlement between Verde Energy USA Ohio, LLC d/b/a Verde Energy and Staff of the Public Utilities Commission of Ohio.

As exclusively first reported by EnergyChoiceMatters.com, Verde under the settlement would agree to the following provisions, to resolve a Staff complaint

• A suspension by Verde Energy of all marketing activities and customer enrollment in Ohio will continue until October 30, 2020, for a total of eighteen (18) months.

• Verde Energy will withdraw from Dominion’s MVR (Monthly Variable Rate) customer assignment program for a period of one year, commencing as of the date Verde Energy notified Dominion of its withdrawal from the MVR program. Verde Energy may enroll retail customers through Dominion’s MVR program at the conclusion of this one-year period.

• For all retail electric residential customers enrolled by Verde Energy in Ohio from October 1, 2018 through April 30, 2019, Verde Energy will re-rate those customers to the second lowest 12-month-fixed 100% renewable price shown on the PUCO’s historic apples-to-apples chart for the week of December 17, 2018, adjusted for any rewards provided by Verde Energy to re-rated customers as part of Verde Energy’s shopping rewards program. This will result in refunds of approximately $1,068,000.

• Verde Energy agrees to pay a forfeiture of $675,000.00

OCC urged PUC to reject the settlement

In addition to rejecting the settlement, OCC sought that PUCO:

• Order full restitution to all customers harmed by Verde Energy based on the customer’s rate paid to Verde Energy compared to the applicable default service rate;

• Should require Verde Energy to pay a forfeiture of at least $1.5 million and "significantly" in excess of the $675,000 amounts included in the settlement, and

• Rescind Verde's operating certificate (license) so that it can no longer participate in the Ohio retail markets

A witness from OCC alleged that, "[t]he findings in the Staff Report, as well as the conduct of Verde Energy’s affiliated companies in other retail market jurisdictions, demonstrate that Verde Energy knowingly misled and deceived customers."

A witness from OCC alleged that, "The findings in the Staff Report demonstrate that Verde Energy lacks the managerial capabilities to operate a competitive retail utility service that complies with Ohio law and the PUCO’s rules."

A witness from OCC alleged that, "In my opinion, the proposed Settlement fails to properly address the PUCO’s findings with respect to Verde Energy in the Staff Report, and fails to ensure that customers will not be harmed in the future, particularly in light of the long-standing pattern of misrepresentation and abusive conduct by the affiliates of Verde’s parent company in other states."

In particular, a witness for OCC said, "Permitting Verde Energy to offset customers’ restitution with ambiguous 'rewards' is an outrageous and unique settlement provision that violates any notion of reasonableness."

OCC further opposed the use of a renewable energy rate from the PUCO Apples to Apples site to calculate compensation (as described above), rather than using the default service rate

OCC also opposed limiting restitution to customers enrolled from October 1, 2018 through April 30, 2019,

Another witness for OCC alleged, "Based upon my review of customer contact and/or complaint information provided by the PUCO and through discovery from Verde, as well as the specific customer information provided in the Staff Report and other customer complaints at the PUCO, Verde has engaged in a recurring pattern of unfair, deceptive, and unconscionable sales practices in the process of enrolling customers in electric and natural gas choice programs. Customers were promised prices that were lower than the utility rates even though this was simply not true. From the information that was provided by the PUCO and my review of Verde offers on the PUCO Energy Choice Ohio website, it is highly doubtful that any residential customers actually saved money with Verde compared to the utilities' standard offers.

The witness for OCC alleged, "Staff reviewed a sample of 150 calls to verify compliance with the PUCO's rules. Sales representatives were not following the sales script or were altering the sales script provided by Verde. Astonishingly, the PUCO Staff identified at least one or more compliance issues with 100 percent of the Verde marketing calls made to consumers."

In reviewing complaints, the OCC witness alleged, "I found several PUCO complaint records where customers were being charged $0.1599/kWh rates that they were unaware of. And I found several customer contacts [sic] where the variable rate being charged by Verde was even higher. For example, multiple contacts [sic] involved customers being charged upwards of $0.1899 kWh."

PUCO Staff submitted testimony in favor of the settlement.

Case No. 19-0958-GE-COI

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