PUC Approves Supplier's License Renewals Opposed By OCC

Commissioner Warns All Suppliers That PUC's Patience Is Not Unlimited

December 30, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Public Utilities Commission of Ohio approved the renewal applications of Verde Energy USA Ohio, LLC d/b/a Verde Energy for certification as a competitive retail electric and gas service provider in Ohio.

As previously reported, the Ohio Consumers' Counsel had asked that PUCO deny Verde’s renewal applications and require Verde to exit the state of Ohio permanently. Citing various complaints and investigations into Verde and its affiliates in Ohio and/or other states, OCC alleged that the company has failed to satisfy the regulatory standards for renewing its CRES and CRNGS certifications. Alternatively, OCC sought various conditions on the license renewal, such as a price cap for Verde relative to the default service rate (story here).

PUCO previously addressed an investigation of Verde's Ohio marketing and business practices by adopting a settlement which included, among other things, a monetary forfeiture, customer re-rates, Verde's one-year withdrawal from Dominion’s MVR program, and a compliance program. See more background on the investigation and settlement in our prior story here

In support of its renewal applications, Verde had noted various changes that it has undertaken, including marketing changes.

"At the very top, the company will be limiting the number of third-party vendors it uses for its telemarketing and door-to-door marketing programs. Instead of using multiple vendors for the same geographic area, Verde Energy will only use one vendor in each area and will ensure that there is no overlap in vendors," Verde had said in a filing

"In addition to changing the structure of its management of third-party vendors, Verde Energy will also be revamping its training and oversight of its marketing agents. That will include working directly with the agents of third-party vendors to provide Verde Energy specific training on the company's policies, Ohio regulations, and the do's and don'ts of working with interacting with potential customers," Verde had said in a filing

Verde had also said that it will monitor outbound telemarketing and door-to-door vendors, as further detailed in our prior story here

PUCO Staff had recommended approval of the license renewals, citing the numerous changes Verde has made to its operating procedures in Ohio as a result of the investigation proceeding and Verde's compliance plan

PUCO said that with the various alleged behavior disposed of through the adopted settlement in the investigation proceeding, the only issue in the license renewal proceedings is Verde's managerial, technical, and financial capability, and PUCO found that, "Verde appears managerially, financially, and technically fit and capable of performing as a CRES and CRNGS supplier in compliance with all applicable regulations adopted under R.C. Chapter 4928 and 4929."

Verde provided the following statement concerning the matter:

"We are pleased with the Commission’s approval and look forward to offering energy choice in compliance with local and state regulations to Ohioans for years to come."

--- Statement from Verde

More specifically, PUCO said that, "With our adoption of the Stipulation in the Investigation Case requiring multiple corrective actions by Verde and significant oversight by Staff, the Commission finds that the only relevant issues in these certification proceedings are whether Verde has the managerial, technical, and financial capability to be a CRES and CRNGS supplier in this state, as required by R.C. 4928.08 and 4929.20. Staff has thoroughly reviewed Verde’s managerial, technical, and financial capability and has recommended that Verde’s applications should be approved. Of particular importance, Staff determined that, with all of the changes implemented by Verde in response to the Investigation Case, appropriate steps have been taken to help prevent future issues of non-compliance with Commission rules. Ultimately, Staff believes that its concerns have been addressed, and to Staff’s knowledge, the circumstances have not changed since the Commission approved the Stipulation."

"Upon reviewing the applications for certification renewal, as supplemented, and Staff’s recommendation, we find that Verde appears managerially, financially, and technically fit and capable of performing as a CRES and CRNGS supplier in compliance with all applicable regulations adopted under R.C. Chapter 4928 and 4929. Accordingly, Verde’s renewal applications for certification as a CRES and CRNGS supplier in this state should be approved for two years," PUCO said

"After reviewing the many motions, memoranda, and comments filed in these cases, we find that no party has raised material issues or concerns regarding Verde’s managerial, technical, and financial capability that were not already resolved through the Investigation Case. To the extent that an argument or recommendation has not been addressed below, it has been rejected," PUCO said

"We specifically reject OCC’s arguments that were previously raised in the Investigation Case. OCC’s initial comments demonstrate that its focus is to re-litigate the Investigation Case rather than assess, based on current circumstances, Verde’s managerial, technical, and financial capability concerning the CRES and CRNGS renewal applications at hand. OCC relies exclusively on the record in the Investigation Case to support its claims that Verde does not have the managerial, financial, or technical capabilities to operate as a CRES and CRNGS supplier in this state. To that end, OCC has not provided the Commission with any new evidence of alleged violations of the Commission-approved Stipulation, rules, or regulations. Moreover, Staff is unaware of any new facts that would merit a change in its opinion that the Stipulation adequately addresses Verde’s prior compliance issues," PUCO said

"The Commission again denies OCC’s request to take note of the forfeitures and other penalties assessed by other jurisdictions on Spark affiliates because these proceedings involve facts and evidence different from these proceedings. Furthermore, as we found in the Investigation Case, OCC has not demonstrated that its expertise is necessary to supplement Staff’s review of the compliance plan. Notwithstanding, we acknowledge OCC’s concern and agree that Verde must thoroughly comply with the Stipulation and Commission rules. Accordingly, we direct Staff to continue monitoring Verde to ensure the Company’s compliance with the Commission’s rules, the Stipulation, and the compliance plan," PUCO said

"It appears as though OCC’s participation, in these cases, was intended to cast doubt regarding Verde’s potential to comply with the Commission-approved Stipulation, which OCC already litigated in the Investigation Case. We also note that OCC filed an application for rehearing in the Investigation Case, which is currently pending before the Commission. To permanently banish Verde from this state after our approval of the Stipulation in the Investigation Case, without first giving the Company a chance to rectify and rehabilitate itself, would conflict with state policy pursuant to R.C. 4928.02 and 4929.02, as well as violate a basic standard of equity. We agree with Verde that OCC’s 'all-or-nothing' approach is against the public interest and would deter other CRES and CRNGS suppliers from operating in Ohio’s marketplace. We believe such an approach would not only undermine Ohio’s competitive market, it would also run counter to Ohio laws and regulations governing competitive electric and gas suppliers and send the signal that any allegations of non-compliance will result in automatic certificate revocation," PUCO said

"That said, any future issues brought to the attention of this Commission concerning alleged non-compliance with the Ohio Administrative Code requirements will have inferential value regarding the efficacy of the remedial actions undertaken by Verde, and the probative value more generally concerning the managerial and technical capabilities of Verde will also be taken into account," PUCO said

While voting to approve the renewals, Commissioner Daniel R. Conway warned Verde -- as well as other suppliers -- that the Commission's patience is not unlimited. Conway said that the state does not need any one particular supplier to be licensed in order to have a robust market that meets the state's policy of competition. Conway said that he will be watching carefully.

Cases 11-5886-EL-CRS, 13-2164-GA-CRS

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