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Regulator's Staff Seeks Notice Of Violation That Would Fine Retail Supplier $1 Million, Require Return Of All Of Supplier's Customers In State To Default Service

September 21, 2021

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Copyright 2010-21
Reporting by Paul Ring •

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Staff of the Office of Education, Outreach, and Enforcement (EOE or Staff) of the Connecticut Public Utilities Regulatory Authority moved that PURA issue a Notice of Violation and Assessment of Civil Penalty (NOV) against Clearview Energy, Inc. which would impose a civil penalty of $1 million against Clearview and which would require Clearview to return all of its Connecticut customers to default service

Staff's proposed NOV would also require restitution to certain customers and would suspend Clearview's electric supplier license for three years

Clearview Energy provided the following statement concerning the matter:

"Since 2006, Clearview Energy has provided green product options for 13 states and the District of Columbia. Since 2007, Clearview Energy has served over 140,000 Connecticut consumers.

"Clearview Energy has been a strong proponent of the Electric Vehicle (EV) market. Clearview Energy rolled out one of the nation's first free evening EV charging programs. This program, which encourages EV owners to charge their vehicles at night, has helped support EV sales and reduce the impact on the grid.

"Clearview Energy believes its 3.8-star Google reviews and A+ Better Business Bureau rating are a testament to its quality customer service. With this track record, Clearview Energy was disappointed to hear of the EOE's allegations.

"Clearview Energy plans to work closely with PURA to resolve the issues that have been outlined in the Notice of Violation, so that it can continue providing electricity to the people of Connecticut. "

--- Statement from Clearview Energy

To the extent PURA were to adopt Staff's recommendations and were to issue an NOV, Clearview would have the right to a hearing to contest the NOV

Staff noted that with respect to certain items required to be included in TPVs, "The Authority indicated it required the customer to state the information themselves, rather than the TPV agent stating it to the customer and the customer confirming, because 'requiring the customer to provide her name and account number attempts to ensure it is the customer, and not someone posing as the customer, completing the TPV."

In the proposed NOV, Staff alleges that, "There is reason to believe Clearview violated the marketing standards and Conn. Gen. Stat. §§ 16-245o and 16-245s by not following proper third-party verification procedures."

In the proposed NOV, Staff alleges that, "In the recordings submitted by Clearview, the TPV agent reads the customer's name key, address, and phone number to the customer. See Response to EOE-38, Exhibits B-U. The Authority has reason to believe this violates the Marketing Standards and Conn. Gen. Stat. § 16-245s."

In the proposed NOV, Staff alleges that, "Pursuant to the Marketing Standards the TPV should not continue if the customer has a question, yet when a customer asks questions regarding the rate and early termination fees, the TPV agent attempts to answer the customer's question and tells the customer that information will be disclosed later in the verification process."

In the proposed NOV, Staff alleges that, "The Authority has further reason to believe Clearview's TPVs do not follow the Marketing Standards, which require a TPV to 'confirm that the customer understands the contract with supplier will renew automatically and it could renew at a rate different from the rate at which the customer currently is signing up,' and require the TPV agent to state, 'Are you aware that by authorizing this transaction, you confirm that you are entering into a contract with [Electric Supplier], which changes your electric generation service to [Electric Supplier].' Decision, Exhibit B, p. 11-12 (emphasis added [by EOE]). Throughout the TPVs the Authority did not hear the TPV agent explain that the contract could be renewed with a different rate and the Authority did not hear the direct quote above. See Response to EOE-38, Exhibits B-U."

In the proposed NOV, Staff alleges that, "There is reason to believe Clearview violated the marketing standards and Conn. Gen. Stat. § 16-245o(h)(3) by failing to ensure its website offers aligned with the rate board and by failing to update the standard service rate on its website."

In the proposed NOV, Staff alleges that, "By its own admission, Clearview failed to ensure the rates aligned between the Rate Board and its website, and failed to update the standard service rate on its website. Response to EOE-30. There is reason to believe both Clearview's actions and its explanation demonstrate a lack of managerial capability. Clearview attempted to explain its failure by stating that the employee responsible for the task had left Clearview's employment. Id. There is reason to believe the reliance on one employee to be aware of and perform a regulatory requirement, and the admitted failure to codify the internal process to meet that requirement, demonstrates lack of managerial capability."

In the proposed NOV, Staff alleges that, "There is reason to believe Clearview violated the authority's decision in Docket No. 14-07-19RE05 when sending information regarding residential bills to business customers."

The Docket No. 14-07-19RE05 (RE05) decision requires certain supply summary and next cycle rate information to be included in residential customer bills

In the proposed NOV, Staff alleges that, "In response to a July 14, 2021 complaint, Clearview provided the welcome letter it sent to business customers, which stated the first page of the business customer's electric bill contained the supply summary, including the rate, next cycle rate, and cancellation fee among other items. See Attachment to Interrogatory EOE-36. When asked by EOE why it provided this information to business customers when supply summary information is not included on business customers' bills, Clearview appeared to imply it provided the information based on Order No. 13 in the December 19, 2019, Decision in Docket No. 14-07-19RE05 (RE05 Decision)."

In the proposed NOV, Staff alleges that, "It was false and misleading to state to business customers that the first page of their bills would provide 'detailed information about your supplier's rate, the term of your contract and rate, the next cycle rate, any cancellation fee, and a comparison of your supplier charge to the charge you would have incurred at the Standard Service rate,' and to include a sample of copy of a residential customer's bill. Business customers do not receive this information on their bills and implying that they should see a bill that contains such information (and looks like the sample provided) would confuse customers. Contrary to Clearview's assertion, this is not a harmless error. Not all business customers are multi-million dollar corporations with energy managers who would know the information provided by Clearview was incorrect. Small, 'mom and pop' businesses would expect to see bills offering information they simply would never receive. Further, as Clearview acknowledges, these small business customers are likely Connecticut residential customers; therefore, incorrect expectations regarding their electric bills contributes to confusion regarding next cycle rate and the comparison to standard service that the Authority has attempted to alleviate."

In the proposed NOV, Staff alleges that, "Clearview admitted to sending 1,032 incorrect letters to business customers. The Authority has reason to believe every letter sent violated the RE05 Decision and illustrates Clearview's lack of managerial capacity and inability to properly serve its customers."

In the proposed NOV, Staff alleges that, "There is reason to believe Clearview violated Conn. Gen. Stat. §§ 16-245d(a)(2) and 16-245o(f)(2) by failing to update the supply summary on a customer's bill to reflect the correct cancellation fee."

In the proposed NOV, Staff alleges that, "EOE received four complaints from customers indicating they enrolled in an offer that did not contain a cancellation fee, but received contracts that did. Clearview indicated it was unable to determine if 1,960 customers received the incorrect contracts and would waive cancellation fees for these customer [sic]. However, Clearview did not change the ETF displayed on the customers' bills. Instead, Clearview emailed Eversource and UI requesting that the EDCs change the ETFs to $0. Response to EOE-37. The Authority has reason to believe it demonstrates a lack of managerial capability to not understand the procedure for changing information on the supply summary of a customer's bill."

In the proposed NOV, Staff alleges that, "Clearview was required to provide accurate information to the EDCs for provision on a customer's bill. The Authority has reason to believe Clearview ignored its legal responsibility, attempted to defer the work it was legally required to perform to the EDCs, and did not understand how to change supply summary information on a customer's bill itself. There is further reason to believe Clearview did not provide accurate information, has incorrectly stated a cancellation fee on 1,960, but possibly an indeterminable number of customer bills, and such actions show a lack of managerial capability."

In the proposed NOV, Staff alleges that, "There is reason to believe Clearview violated Conn. Gen. Stat. § 16-245o and marketing standards by failing to properly enroll customers and send customer notifications."

In the proposed NOV, Staff alleges that, "The Marketing Standards require Clearview to submit a customer's enrollment within seven business days of receipt. Decision, Exhibit B, Section B.2. The Marketing Standards further require Clearview to send notifications to customers when an enrollment or reenrollment fails to timely process for any reason."

In the proposed NOV, Staff alleges that, "By Clearview's own admission, it failed to submit at least 68 enrollments in a timely manner. Response to EOE-34 (this does not include individual customers contained in other complaints). By Clearview's own admission, it failed to notify 108 customers that their enrollments were rejected. Response to EOE-25. Finally, by Clearview's own admission, it failed to notify 342 customers that their enrollments did not process. Response to EOE-34. The evidence indicates that Clearview's management does not take sufficient care to ensure it fulfills Marketing Standards requirements."

In the proposed NOV, Staff alleges that, "There is reason to believe Clearview violated Conn. Gen. Stat. § 16-245 by failing to demonstrate the requisite managerial capability to maintain its electric supplier license."

In the proposed NOV, Staff alleges that, "In Docket No. 07-08-17RE02, EOE has sent notices regarding noncompliance with reporting requirements on April 19, 2021 and June 11, 2021. Further, in Docket No. 06-10-22, monthly data reported by the EDCs indicated that in the first two months after the implementation of Docket No. 14-07-19RE05, Clearview had more than 8,000 customers returned to standard service due to Clearview not sending correct supply summary information to the EDCs."

In the proposed NOV, Staff alleges that, "Based on the information detailed above, there is reason to believe Clearview currently lacks the managerial capability to serve Connecticut customers. Although Clearview rectified the complaints filed by each customer, Clearview was unaware of these problems until either a customer complained or EOE required it to investigate. Further, Clearview provided TPVs and scripts with no acknowledgement, and presumably no realization, they violated the Marketing Standards."

In the proposed NOV, Staff alleges that, "Clearview claims to have processes in place to implement requirements and protect customers, but the evidence indicates otherwise. The Authority has reason to believe Clearview does not possess the managerial capability to monitor its processes, if any, to ensure compliance with the applicable statutes, regulations, and Authority decisions, nor does it possess the managerial capability to protect its customers or to provide the proper information to them. Clearview often indicated 'processing errors' caused customers to be overcharged, but could not offer further explanation. Clearview repeatedly failed to send customers notices they were required to receive and sent incorrect welcome packages to customers. Clearview sent customers contracts with different terms than indicated when they enrolled. Clearview failed to submit customers' enrollments and renewals in a timely manner. Unfortunately, this is not even the first time Clearview has shown these deficiencies. In fact, Clearview paid so little attention to the processes being implemented as a result of Docket No. 14-07-19RE05 that thousands of its customers were returned to standard service because Clearview did not know how to comply with the decision, and then it attempted to charge customers an early termination fee for being returned to standard service because of Clearview's errors. Docket No. 06-10-22."

In the proposed NOV, Staff alleges that, "A documented process is worthwhile only if it works. Although Clearview sited [sic] to internal processes that should have worked, it admits they are not even written and continuously fail to be followed when employees leave and new employees are hired. Response to EOE-31. A process that depends on a singular employee's knowledge is not a process. Further, the error of some of Clearview's processes should have been apparent from the outset. For example, Clearview indicated its failure to send certain notices was due to a programming error that removed 'common reject reasons' from the 'standard workflow' and required they be addressed manually. Response to EOE-31. Clearview then goes on to indicate, 'Examples include: account number not containing the correct number of digits; missing name key; name key greater/less than four characters; missing or incomplete address; or other required fields in the EDI enrollment transaction.' Id. By Clearview's own admission these are common reject reasons, and it demonstrates lack of managerial capability to design a system that would remove all of the most common reasons for rejection from the automated process, place them into a manual process, and then fail to monitor the manual process to ensure it functions properly. The record indicates Clearview's processes did not work to protect customers from Clearview's mismanagement."

In the proposed NOV, Staff alleges that, "Throughout the past year, the record indicates that due to Clearview's lack of managerial capability, its customers have been dropped to standard service, failed to have their enrollment processed, failed to have their renewals processed, failed to be notified of their enrollment or renewal not processing, failed to receive correct contracts, and failed to be charged the correct rates. Clearview's management also failed to timely file the appropriate compliance filings and had to be reminded in a correspondence containing the threat of license revocation, not once, but twice. Further, Clearview has ignored the Marketing Standards and enrolled customers using incorrect TPVs. The record indicates that Clearview's management has systematically failed its customers throughout the past year and a half and does not demonstrate the capability necessary to maintain an electric supplier license in Connecticut."

In the proposed NOV, Staff alleges that, "Thus far in 2021 EOE has received fifteen complaints regarding Clearview (the second highest number of complaints; only behind one other supplier that is currently the subject of a license revocation proceeding). In 2020 EOE received 46 complaints regarding Clearview (almost double the second-highest supplier with 26 complaints). That so many customers have to complain regarding their interaction with Clearview demonstrates Clearview's lack of managerial capability in dealing with its customers."

In the proposed NOV, Staff alleges that, "Clearview has grossed more than $26 million in Connecticut, charging some customers more than sixteen cents per kWh."

With respect to the restitution proposed by Staff, Staff proposed that, "Customers enrolled using illegal TPVs are not valid customers. As a result, Clearview must pay each of these customers identified in Response to EOE-38 the difference between what they paid Clearview for the length of their enrollment and the applicable standard service rate."

Docket No. 07-08-17

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