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Consumer Counsel Seeks Rate Cap, Ban On Door-to-Door Marketing, Auto-Renewals For Retail Supplier In Supplier's License Renewal
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The Ohio Consumers' Counsel filed comments at the Public Utilities Commission of Ohio opposing the electric and gas license renewal applications of Verde Energy, and sought several conditions on the licenses if they are granted
Among other things, OCC said that Verde should have to accept a condition, to obtain renewal of its certificates, to not charge customers more than a designated percentage of the applicable gas utility’s standard offer or GCR, as applicable, and the applicable electric utility’s price to compare. That percentage limit should be no more than 150% of the applicable comparison rate that consumers could otherwise obtain from their utility, OCC said
OCC also sought to prohibit Verde from using door-to-door sales and using auto-renewals
Verde Energy issued the following statement concerning the matter.
"Verde will formally respond to OCC’s comments on May 18 through a public filing on the PUCO case docket. The filing will address all of OCC’s comments and will speak for itself."
--- Statement from Verde Energy
OCC cited alleged behavior from Verde that led to a previously reported settlement approved by PUCO (see details of the alleged behavior and violations as well as the terms of the settlement here)
OCC said in its filing with PUCO that, "With great understatement, the PUCO Commissioners described Verde as not a
'sympathetic actor.' Over the past two years, Verde has misled, deceived, and conned Ohioans
into signing up for Verde’s unreasonably high electric and natural gas rates, typically without
their informed consent, and sometimes without any consent at all. Even customers of other
marketers were not safe from Verde, given the claims of IGS that 'some of IGS’s customers
were victims of Verde’s potentially misleading and deceptive sales tactics.'"
OCC said, "Verde has earned getting the boot from this state many times over. It had its chance—and
it blew it. And now, with the suffering of Ohioans from the coronavirus emergency and their
ensuing financial emergency, there could hardly be a worse time to allow the worst of corporate
greed (Verde) to continue any business with the good people of this state. The PUCO should see
to it that Verde exits the state for good, no later than when its certificates expire on November 1,
2020."
OCC said that although PUCO approved the settlement described above without modification, "it also
adopted portions of the Staff Report (which OCC put into evidence), ruling that 17 violations
were proven by a preponderance of the evidence"
OCC quoted PUCO's order as stating, "We find that the record in this case, including the Staff Report, contains sufficient
evidence to establish a limited number of discrete violations, as alleged by Staff in
the Staff Report, of which there were approximately 17. The Staff Report
specifies the rule, which was allegedly broken, provides information identifying
which complaint the violations reference, and provides a description of the
evidence supporting the violation (OCC Ex. 5 at 9-13, 15, 23, footnotes 4-8, 11-
14, 17-21, 22-23, 27). Moreover, Verde did not dispute the violations set forth in
the Staff Report. Thus, the evidence in the record demonstrates, by a
preponderance of the evidence, that 17 violations occurred, as alleged in the Staff
Report."
OCC noted that in Verde's renewal application, Verde disclosed that in 2019, the Ohio Attorney General opened an investigation of Verde. The disclosure of an AG investigation had been exclusively first reported by EnergyChoiceMatters.com in December (see story here)
OCC said that Verde's renewal application should be denied, alleging that the company is, "managerially unfit to provide competitive
services in the state," quoting language from a PUCO Staff report in the settled investigation proceeding at 19-0958-GE-COI
OCC alleged, "Verde produced documents in the current cases in response to OCC discovery revealing
no fewer than 127 rules and statute violations."
Among those provisions alleged to have been admitted by Verde are various instances in which the company said that a TPV was non-compliant, and instances in which there were "discrepancies" in the sales pitch and/or enrollment information / authorization
"In the vast majority of these cases, the relevant admission of a violation occurred after the
Staff Report was filed in the Investigation Case (with some as recent as March 2020)," OCC alleged
OCC stated, "As explained above, the PUCO found 17 violations of the PUCO’s marketer rules, most
of which related to misleading and deceiving customers, including making false promises of
savings, spoofing customers by pretending to be the IRS or the local distribution utility,
providing inaccurate information about customers’ rights under the PUCO’s rules, enrolling
customers without their consent, enrolling customers despite discrepancies in the third party
verification, failing to notify the customer that the contract would renew at a monthly variable
rate, and renewing customers’ contracts without sending them the required notice of
expiration. And OCC has now identified more than 100 additional examples of the same type
of behavior."
If PUCO does approve the renewal applications, OCC sought a variety of conditions on Verde
Among these conditions are:
1. The PUCO should not allow Verde to use automatic contract renewals
(known as 'evergreen' contracts) to continue contracts with
consumers without their affirmative consent. In the absence of a
consumer’s affirmative renewal of the contract, the consumer should
be enrolled in his or her utility’s standard offer.
2. Verde’s PUCO certificates should be revoked in the first instance of
spoofing of Caller ID information and/or slamming (stealing
customers), as these are unlawful and deceptive means to acquire
customers.
3. Verde should not be permitted to conduct door-to-door sales with
customers.
4. The PUCO should prohibit Verde from accessing the utilities’
customer contact information for marketing purposes.
5. Verde should be required to conduct regular audits (by an
independent auditor) of its third-party marketing vendors to ensure
they comply with the PUCO’s rules for consumer protection. Those
audits should be shared with the PUCO Staff and OCC for review.
6. Verde should have to accept a condition, to obtain renewal of its
certificates, to not charge customers more than a designated
percentage of the applicable gas utility’s standard offer or GCR, as
applicable, and the applicable electric utility’s price to compare. That
percentage limit should be no more than 150% of the applicable
comparison rate that consumers could otherwise obtain from their
utility.
Concerning the proposed ban on auto-renewals, OCC said this condition is needed because of alleged rollover contract instances in which, "Verde
charged electric customers a fixed rate of $0.0599/kWh and then switched them to a monthly
variable rate of $0.19/kWh, resulting in huge overcharges."
OCC said that alleged failures by Verde with respect to the renewal notice rules prompts the sought condition as well
"When the PUCO Staff confronted Verde with these customer complaints, Verde claimed
that it was not required to provide contract expiration notices under Verde’s terms of service
with the customers. But as the PUCO Staff correctly noted in the Investigation Case Staff
Report, Verde’s 'terms of service do not supersede the Ohio Administrative Code,'" OCC said
"Verde’s failure in the past to provide proper contract expiration notices to customers as
required by the PUCO’s rules -- and its pushback that the PUCO’s rules are subordinate to
Verde’s customer terms of service -- demonstrates the danger to consumers from automatic
contract renewals," OCC said
If PUCO allows Verde to conduct door to door sales, OCC sought several conditions on such sales process, including prohibiting Verde from offering gift or cash cards to potential customers as an
incentive to enroll
Case No. 11-5886-EL-CRS et al.
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Citing Coronavirus Emergency, OCC Says No Worse Time To Allow Supplier To Continue Operating
May 5, 2020
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Reporting by Paul Ring • ring@energychoicematters.com
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