PUC Staff Seek Forfeiture Of Up To $10.2 Million From Retail Supplier, Citing Alleged Violations
December 16, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Staff of the Public Utilities Commission of Ohio have issued a new notice of probable non-compliance to PALMco Power OH, LLC, d/b/a Indra Energy and PALMco Energy OH, LLC d/b/a Indra Energy (collectively, PALMco) under which Staff is seeking a forfeiture of up to $10.2 million due to alleged misleading and deceptive behavior by PALMco
Leadership of Indra Energy issued a statement in response to the new notice of probable non-compliance; the full statement is below.
In the new notice of probable non-compliance, Staff alleged, "between August 1, 2019 and December 10, 2019, the Commission’s call
center received 25 contacts regarding PALMco’s gas rates and 26 contacts regarding PALMco’s electric
rates. During Staff’s investigation of those customer contacts, Staff found that customers were
concerned about issues related to the high bills that they received due to PALMco’s very high rates.
Based on Staff’s investigations and a review of other available rates for CRES and CRNGS service, Staff
believes that PALMco is charging unconscionably high rates."
Staff alleged that, "Staff requested additional data from PALMco regarding the variable rates that it has charged
since August 2019, the number of customers on variable rates, and the reason for the increase
in rates. After reviewing PALMco’s responses, Staff believes that PALMco is charging variable
rates that are unconscionably higher than the utilities’ standard offer and other variable rates
available to customers. In addition, Staff reviewed the market prices for 2019 and found that
market prices fluctuated very little during this calendar year. Finally, PALMco’s contract advises
its customers to visit https://indraenergy.com/ohio/ohio-variable-rates/ to find Indra’s variable rate
pricing, but that website has not been updated since March 2019."
PUCO said in a news release that, "In one consumer complaint, PUCO staff alleges that between July and August, PALMco’s electric rate increased by more than 70%."
Staff alleged that, "Staff finds these facts, when taken as a whole, lead Staff to conclude that PALMco’s
unconscionable behavior not only violates the Commission’s rules and statutes, but did so
Citing the prior notice, Staff alleged that, "PALMco was on notice as of April 16, 2019 that Staff believed it was
engaging in misleading, unfair, and unconscionable conduct. However, PALMco continued to
engage in the same behavior and charge customers unconscionable rates."
Staff alleged that, "As an example of an unconscionable electric rate, in one complaint received by the PUCO Call Center, a
PALMco customer was on the variable rate for May, June, July and August 2019. From July to August,
the rate being charged by PALMco for CRES went from $0.08924 per kwh to $0.15552, which is a 74%
increase. In August, the utilities’ standard service offer was $0.05124 per kwh. According to the Energy Information Administration (EIA) electric retail pricing data, retail pricing was
stagnate through August for this year. Therefore, Staff does not believe that market forces could
reasonably account for PALMco’s rate increase."
Staff alleged that, "As an example of an unconscionable gas rate, in one complaint received by the PUCO’s Call Center, a
PALMco customer was on a variable rate from May to October 2019. From July to August, PALMco’s
rate increased from $0.087530 per CCF to $1.46420, an increase of 67%. In August, the utilities’ default
standard choice offer was $0.343 per CCF."
Staff alleged that, "The New York Mercantile Exchange (NYMEX) Henry Hub pricing also indicate little fluctuation in prices
from March to November of this year as you can see because the SCO rate fluctuates with the Henry
Hub closing price. However, PALMco’s unit price increased 67% from July to August, when August was
the lowest NYMEX rate of the year. Staff believes that this is a pattern of PALMco charging
unconscionable rates across PALMco’s footprint in Ohio. In response to a data request, PALMco
informed Staff that PALMco currently has over 10,000 customers on a variable rate in Ohio."
"Due to the egregious nature of PALMco’s actions and continuing to charge unconscionable rates while
they are currently under investigation by the Commission for the same or similar conduct in Commission
Case No. 19-0957-GE-COI, Staff recommends that a case be opened with a case code of 'Commission
Ordered Investigation' (COI) in order for Staff to continue to analyze PALMco’s conduct and present a
case before the Commission to consider the remedies outlined in Ohio Adm.Code 4901:1-23 and 4901:1-
34," Staff said
Indra Energy leadership issued the following statement in response to an announcement from PUCO concerning the Staff notice:
"Our Ohio companies, which market as PALMco, have been negotiating successfully for several months with the Staff of the Public Utilities Commission of Ohio. We have worked diligently and cooperatively to address several concerns raised in a PUCO proceeding initiated last spring.
"We are approaching the end of that settlement process and are awaiting a PUCO decision on the stipulation proposed by PALMco and Staff. We believe we have reached an agreement that is in the best interests of our customers in Ohio. Despite this unexpected decision by the PUCO to open a second proceeding today, we remain committed to the process we have been engaged in for several months now.
"We have already taken significant steps beyond the proposed settlement. First, as a demonstration of good faith to Staff at the onset of negotiations, PALMco voluntarily stopped marketing variable rate plans or enrolling new customers in Ohio in April 2019. Second, PALMco has already paid over $441,000 in refunds to Ohio customers, without waiting for the settlement to be approved. These refunds include over $85,000 paid to consumers who enrolled outside the time period considered in the initial proceeding. Third, we plan to lower the prices for gas and electricity for our existing (variable price) customers under their existing contracts.
"Our intention is to orderly and expeditiously wind down our existing business in Ohio, with the best interests of our customers being paramount. We believe our settlement agreement with Staff remains the best path forward.
"We look forward to approval of the settlement and continued cooperation with Staff and the PUCO to best serve the interests of Ohio retail energy customers."
--- Statement from Indra Energy leadership
PUCO in a news release said that it "initiate[d]" a case for an adjudicatory process to address the Staff notice (Case 19-2153-GE-COI)
To address these issues of probable non-compliance, Staff proposes that PALMco take the following corrective actions:
1. "Staff strongly recommends that PALMco immediately cease charging customers
variable rates in excess of the default service offer in Ohio. Because PALMco
failed to inform its customers of how it would be calculating its variable rates
and has continued to charge customers unconscionably high variable rates
inconsistent with other market rates in disregard of an ongoing Commission
investigation into PALMco’s provision of CRES and CRNGS in Ohio, Staff believes
that PALMco cannot continue to charge customers a variable rate," Staff alleged
2. "PALMco should immediately re-rate all customers that were charged a variable
rate from August 1, 2019 to present. 'Re-rate' or 're-rated' means PALMco will
calculate the difference between the rate it charged to the customer and the
rate the customer would have paid to the applicable utility under the utility’s
standard service offer or default rate, and refund or credit the difference to the
customer," Staff said
3. "PALMco should send a written notice to all customers on a variable rate contract
that they will be re-rated and why," Staff said
"Finally, Staff is proposing a forfeiture of up to $10,222,000.00 against PALMco for the above-mentioned
failures to comply with the requirements found in the Ohio Administrative Code and
Ohio Revised Code," Staff said
Staff's letter directed PALMco to respond to the notice of probable non-compliance with
Palmco’s plan to address the above-mentioned areas of probable non-compliance and payment of
the above-mentioned forfeiture amount by Friday, December 31, 2019