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Retail Supplier To Pay $175,000 Under Settlement With PUC Staff, Involves Alleged Misuse Of Eligible Customer List For Enrollments At Storefront Establishments

September 30, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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Reliant Energy Northeast LLC d/b/a NRG Home has entered into a settlement agreement with the Pennsylvania Public Utility Commission's ('Commission') Bureau of Investigation and Enforcement ('I&E') to resolve alleged violations related to customer authorization for switches and alleged misuse of information from the eligible customer list in enrollments conducted at retail storefront establishments and similar public locations

Under the settlement, NRG Home is to pay a civil penalty in the amount of $175,000. Additionally, NRG Home will provide to each of the customers implicated by the settlement, who had one or more of the (168) accounts physically switched to NRG Home, a refund for the entire electric generation supply portion on the customer's bill for the first two (2) billing periods that the customers were switched to NRG Home.

NRG issued the following statement concerning the matter:

"NRG is committed to complying with all PUC rules and regulations. We have reached a settlement with the Pennsylvania PUC's Bureau of Investigation and Enforcement related to some disputed customer enrollments. The informal inquiry was prompted when NRG self-reported issues it discovered through researching a handful of customer complaints. NRG determined that some of its agents acted improperly, made inadvertent processing errors, or enrolled people who attested to being authorized to enroll the account, but actually weren't the account holder. The terms of the settlement are fair and we look forward to putting this matter behind us so we can focus on creating value for and serving our customers."

--- Statement from NRG

The settlement addresses the actual and attempted enrollments of residential accounts by NRG Home and/or agents of NRG Home.

According to the settlement, "A review of the resulting informal consumer complaints to BCS [the PUC's Bureau of Consumer Services] led to an informal investigation initiated by I&E prosecutory staff based on information referred to I&E by BCS. BCS received allegations from residential consumers alleging that their electricity accounts had been switched to receive electric generation supply provided by NRG Home without the customers' authorizations. Many of the unauthorized switching allegations stemmed from NRG's marketing activities at public retail locations, such as big box stores, where NRG agents were utilizing the eligible customer list ('ECL') to obtain the information of prospective customers."

The settlement states, "Between April and September 2018, BCS received approximately six (6) informal complaints submitted by residential customers alleging that their electricity accounts had been switched to receive electric generation service supplied by NRG Home without their authorization."

"BCS' review of these informal complaints determined that the alleged unauthorized enrollments were effectuated by agents who used the ECL at public retail locations, such as big box stores. BCS became concerned that NRG agents were improperly using the ECL, which contains customer information, to switch customers to NRG Home without the customers' consent," the settlement states

"On August 14, 2018, representatives from the Company met with representatives from the Commission's Office of Competitive Market Oversight ('OCMO') and self-reported that in some situations, NRG Home agents improperly used the ECL to enroll customers with NRG's electric generation supply service without authorization. NRG Home advised that it terminated all agents involved in this scheme and that the Company took corrective actions to prevent misuse of the ECL from occurring in the future," the settlement states

The settlement states, "I&E found that between January 1, 2018 and December 31, 2018, NRG Home or agents acting on behalf of NRG Home enrolled 168 residential or small business customers to receive electric generation supply provided by the Company without the customers' authorization, with such enrollments originating from NRG Home's in-person retail and event solicitations."

The settlement states, "Additionally, I&E's investigation found that 28 customer accounts were in the process of being switched to receive electric generation supplied by NRG Home, but that the switch was terminated by NRG Home before the accounts were 'on flow' or actually received electric generation service provided by NRG Home."

The settlement states that NRG Home undertook a number of corrective measures designed to prevent similar occurrences in the future. "Most notably, NRG Home eliminated the ability for sales agents to scroll through the ECL to locate a certain customer. The tool now only permits searching for a specific name and populates information if a match is located. NRG Home has also since deployed a technology solution to authenticate customers' identities, thereby narrowing the ECL search results. Finally, NRG Home tightened its discipline policy for agents found to have committed ECL errors," the settlement states

The settlement states that, had this matter been fully litigated, I&E would have alleged that NRG Home committed the following violation: "NRG Home agents initiated the process of switching the electric generation supplier on at least one hundred ninety-six (196) customer accounts in 2018 and resulted in physically switching the electric generation supplier on one hundred sixty-eight (168) of those accounts without the authorization of the customers." If proven, I&E alleges that such conduct would have violated 52 Pa. Code §§ 54.42(a)(9), and the Standards for Changing a Customer's Electricity Generation Supplier at 52 Pa. Code §§ 57.171-180 (multiple counts).

The settlement states, "NRG Home placed each of the alleged 168 unauthorized enrollments into three different categories: (1) Disputed enrollments, where NRG Home explains that the customer alleges that he or she did not enroll with an NRG Home agent, never spoke to an NRG Home agent or did not sign an enrollment tablet. Disputed enrollments total 71; (2) Unauthorized enrollments, which NRG Home explains include enrollments completed by someone other than the account holder who lives at the same address, was known to the account holder, and attested that they were authorized to make changes on the account when in fact they lacked such authorization. Unauthorized enrollments total 14; and (3) Enrollment processing errors, where NRG Home agents inadvertently selected the incorrect customer account when enrolling the customer or where the agent failed to advise the customer that he or she was switching suppliers until after the enrollment was signed. Enrollment processing errors total 83."

Had this matter been litigated, NRG Home would have raised defenses to the allegations. Among other things, NRG Home would have presented evidence to show that in many instances the switches were authorized and that NRG Home complied with the Commission's regulations in enrolling the customers

In a statement filed with the PUC in support of the settlement, NRG Home stated, "NRG Home acknowledges that some switches were unauthorized due to agent misuse of the eligible customer list ('ECL') at public retail locations, such as big box stores. However, other instances of unauthorized switching that I&E examined during the investigation were the result of inadvertent ECL processing errors. NRG Home further believes that an in-depth review of each account that is the subject of this Settlement would reveal that many of those enrollments were properly processed and no violations of the Commission's regulations occurred."

The settlement's $175,000 civil penalty represents the following: One Hundred Sixty-Eight Thousand Dollars ($168,000) for the 168 customer accounts that were physically switched to and received electric generation supply from NRG Home; and Seven Thousand Dollars ($7,000) for the twenty-eight (28) customer accounts where the process of switching to NRG Home had been initiated but not completed.

Apart from the generation supply refunds discussed above, NRG Home shall also refund any cancellation fee or early termination fee incurred by any of the aforementioned customers from another EGS as a result of the unauthorized switch to NRG Home

Under the settlement, NRG Home agrees to retain customer signatures placed on enrollment tablets used at retail and event locations for a period of one (1) year starting after the entry of a final Commission Order in this matter, and will provide such records to BCS and I&E upon request. NRG Home also agrees to retain any audio recordings of verifications taken at retail and event locations for a period of one (1) year starting after the entry of a final Commission Order in this matter if alternative forms of verification, i.e. electronic customer signatures, are not utilized.

Docket No. M-2020-3006647

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