Updated:
Pennsylvania PUC Denies Retail Supplier's License Application

January 14, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Updated with further description of Ohio ACP order

The Pennsylvania PUC denied, without prejudice, the application of Mega Energy of Pennsylvania, LLC ("Mega Energy") for an electric generation supplier (EGS) license

Mega Energy provided the following statement to EnergyChoiceMatters.com concerning the matter:

"We are surprised and disappointed by the Commission’s Order. Mega was fully transparent in its application and in our communications with Commission Staff. For example, had concerns about a 2018 $506 RPS payment been brought to light prior to today’s decision, Mega would have addressed the matter promptly. Mega is continuing to review the order and evaluate our options in response to it."

--- Statement from Mega Energy

Mega Energy had applied to serve residential, small commercial (25 kW and under demand), large commercial (over 25 kW demand), industrial, and governmental customers in all of the electric distribution company (EDC) service territories throughout the Commonwealth of Pennsylvania.

In denying the license application, the PUC stated in its order that Mega Energy failed, "to demonstrate adequate technical fitness to become a licensed EGS in Pennsylvania."

The PUC in its order stated, "Upon review of Mega Energy’s EGS application, Commission staff noted that Mega Energy responded N/A to the Compliance Sections 5.a, b, c, and d." Such sections ask whether the application or affiliates, "has been or is currently the defendant of a criminal or civil proceeding within the last five (5) years," and, "Identify all formal or escalated actions or complaints, in the Commonwealth of Pennsylvania or any state, filed with or by a customer, regulatory agency, or prosecutory agency against the Applicant, an affiliate, a predecessor of either, or a person identified in this Application, for the prior five (5) years, including but not limited to customers, Utility Commissions, and Consumer Protection Agencies such as the Offices of Attorney General."

The PUC in its order stated, "After searching the Public Access to Court Electronic Records (PACER), Commission staff found more than one class action lawsuit in which the Applicant’s affiliates were named as a defendant. The lawsuits filed in various Jurisdictions against Mega Energy’s affiliates allege violations of the Telephone Consumer Protection Act (TCPA)."

The PUC stated in its order that Staff issued a data request concerning Mega Energy's response to this question, and that Mega Energy responded to the data requests disclosing a number of class action and other lawsuits that were filed in various U.S. District Courts. The PUC stated in its order that Mega Energy stated that these lawsuits were amicably resolved with no finding of liability or were dismissed.

According to the PUC's order, Mega Energy also stated that all of the customer related issues identified above were related to telemarketing activity conducted by outside telemarketing vendors and that these telemarketing vendors were terminated. Mega Energy also stated that it implemented a number of corrective changes. Mega Energy also stated that sales and marketing are now overseen by its Chief Operations Officer

The PUC also cited an order from the PUC of Ohio that, as stated by the Pa. PUC, "directed Mega Energy of Ohio, LLC, to submit payments for their outstanding renewable portfolio standards compliance obligations for the year 2018."

The Ohio order cited by the Pa. PUC is a customary ACP assignment order, and while it notes that Mega Energy did not meet its 2018 RPS compliance obligations (meaning through retiring RECs), the order does not find any violation of PUC rule or state law, but rather memorializes the obligations under the ACP process available to suppliers. Mega Energy had filed an annual RPS status report with PUCO as required, and in such noted that it intended to pay the ACP in lieu of retiring RECs to meet its obligations.

While the Pa. PUC at one point in its order refers to what the Pa. PUC terms, "non-payment per the renewable portfolio standards compliance," based upon the public case record in the Ohio proceeding and the Pa. PUC's own later description of such order, it appears that the Pa. PUC is using this phrase to merely describe that Mega was assigned an ACP obligation. Contrary to the PUC's phrasing, Mega Energy told EnergyChoiceMatters.com that it paid its assigned ACP obligation in June 2020, following the May 2020 order. As such, given the mechanics of the ACP process in Ohio, no "non-payment" occurred, as a formal order is merely used to set the ACP payment amount in Ohio, rather than the existence of such order reflecting any sort of non-compliance

The Pa. PUC stated in its order, "Mega Energy did not disclose this information in its reply to data requests it submitted on June 24, 2020, or in its responses to data request set two, submitted on September 18, 2020, despite having been informed to disclose all matters per the Compliance Sections 5 a, b, c and d of the EGS application."

The PUC further stated in its order that, "Commission staff also researched the complaint scorecards published by the various Utilities Commissions in which Mega Energy’s affiliates are licensed to operate. Of note are the informal complaint statistics for its affiliate Mega Energy of Illinois on the Illinois Commerce Commission’s electric supplier complaint scorecard at https://pluginillinois.org/complaints.aspx. According to the most recent available scorecard for the period of December 2019 - May 2020, Mega Energy of Illinois is ranked 51 out of 56 listed suppliers because of its high complaint rate. The complaint scorecards for prior periods of November 2019 - April 2020 and October 2019 - March 2020, continuously place Mega Energy of Illinois in the lowest rankings due to its high number of complaints."

The PUC further stated in its order that, "Furthermore, we note that on February 12, 2020, the Maryland Public Service Commission denied Mega Energy of Maryland’s application to provide electricity supplier services in the State of Maryland for residential, commercial, and industrial customers. In the denial, the Maryland Public Service Commission cited the high levels of complaints in Texas from July 1, 2019 - December 31, 2019, that resulted in the second highest complaint level among all Texas electricity suppliers."

The PUC further stated in its order that, "The Commission’s regulations at 52 Pa. Code § 54.33(a) states that technical fitness information must be sufficient to demonstrate evidence of competency and experience in providing the scope and nature of the applicant’s proposed services. We find that Mega Energy of Pennsylvania, LLC, was not transparent in disclosing all litigated lawsuits in various state and federal courts in which its affiliates were named as a defendant. In addition, we find that Mega Energy failed to demonstrate the implementation of safeguards to prevent similar customer related occurrences in Pennsylvania. Finally, we find that Mega Energy provided insufficient documentation demonstrating its technical fitness to operate as a supplier of retail power in the Commonwealth of Pennsylvania."

Docket A-2020-3019704

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