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Retail Supplier To Return Residential Customers In State's Market To Default Service, Pay $250,000 Under Settlement With Regulator's Staff

July 19, 2021

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Copyright 2010-21
Reporting by Paul Ring •

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Mega Energy of New England, LLC would return all of its residential electricity customers in Connecticut to default service and "permanently" exit the state's residential market, and pay $250,000, under a settlement with the Office of Education, Outreach, and Enforcement (EOE) of the Connecticut PURA and state's Office of Consumer Counsel, to resolve a Notice of Violation issued by PURA

Mega Energy provided the following statement concerning the matter:

"This settlement brings closure to the investigation that was opened as a result of the actions of a third-party marketing vendor that conducted enrollments on behalf of Mega Energy in Connecticut. While the actions of the vendor and its agents were in no way endorsed or authorized by Mega Energy, the settlement reflects that Mega Energy has agreed to accept responsibility for the vendor’s actions and to provide relief to affected customers. Mega Energy looks forward to moving beyond this unfortunate episode and to continuing to serve commercial customers in Connecticut."

--- Statement from Mega Energy

The NOV that is to be resolved by the settlement had been first reported by (see full details here)

In the NOV, PURA had stated, "the Authority has found evidence that Mega’s marketing contained unfair or deceptive marketing practices and has reason to believe Mega violated Conn. Gen. Stat. §§ 16-245(c), 16-245(g)(2), 16-245o(f)(2), 16-245o(h)(1), 16-245o(h)(2), 16-245o(h)(3), 16-245o(h)(4), 16-245o(j), 16-245s, and 42-110b."

Among other things, in the NOV, PURA had stated, "In the numerous Mega marketing calls reviewed by the Authority, the Authority found that Mega consistently failed to state the standard service rate at any time during the marketing transaction, as required by Conn. Gen. Stat. §16-245o(h)(3)."

In the NOV, PURA had stated, "Suppliers are required to state the standard service rate so customers have a basis of comparison for the rate the supplier is offering."

The NOV had also alleged various violations of third party verification requirements.

The NOV had stated that, "the Authority has reason to believe Mega’s agents remain on the line during the TPV. In multiple TPVs," and that, " "The evidence also indicates that Mega’s agents violated the Marketing Standards and Conn. Gen. Stat. § 16-245s by instructing customers not to ask questions during the TPV and to hold their questions until the TPV is finished."

Specific alleged instances of the alleged violations are further discussed in our prior story here

Under the settlement, Mega agrees to pay a civil penalty in the amount of $250,000, made payable to Operation Fuel, by five equal payments of $50,000 each due every six months until paid in full

Under the settlement, Mega agrees to, "voluntarily, permanently withdraw from the Connecticut residential electric supplier market." This voluntary withdrawal will prevent Mega from serving any Connecticut residential customers and from marketing to any Connecticut customers that are served under Eversource Rates 1, 5, 7, and 18, and UI Rates R and RT, or their future equivalents, the settlement states

The settlement provides that this withdrawal shall be accomplished through a return of such residential customers to default service

As of the most recent migration reports filed by the utilities (May data for CL&P, June data for UI), Mega Energy was serving about 1,150 customers listed as "residential" under the migration reports (993 at CL&P; 165 at UI)

The settlement provides that Mega may continue to serve business and commercial customers on business and commercial rates (Eversource Rates 27, 29, 30, 35, 37, 40, 41, 55, 56, 115, 116 117, and 119; UI Rates GS, GST, LPT, M, and U) or their future equivalents.

Under the settlement, Mega will reimburse all customers enrolled by a specific third-party vendor the difference between the rate the customer paid and the standard service rate for the entirety of the time the customer received service from Mega during which the rate the customer paid was more than the standard service rate.

The settlement provides that, "Mega shall reimburse all customers implicated by next cycle rate violations occurring between January 2016 through January 2019 in the amounts listed on the attached confidential spreadsheets."

The settlement agreement does not represent an admission or concession by Mega as to the claims, or facts or circumstances surrounding the claims

Docket 13-03-09

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