ALJ Would Approve Settlement Under Which Retail Supplier Would Pay $1 Million And Extend In-Person Marketing & Telemarketing Suspension, Dismissing Objections From Consumer Advocate
January 21, 2022 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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A Pennsylvania ALJ in an initial decision (recommended decision) would approve a settlement between Verde Energy USA, Inc. and the Pennsylvania PUC's Bureau of Investigation and Enforcement ('I&E'), under which Verde would pay $1 million and extend a moratorium on in-person marketing and telemarketing in Pennsylvania for six months, to resolve alleged instances of slamming and alleged misleading and deceptive conduct
Among other things, I&E had alleged that agents of Verde had misrepresented a relationship with PPL; had represented that the customer's current retail supplier was going out of business; had engaged in spoofing phone numbers; and had threatened to disconnect customers’ services. I&E had also alleged that Verde slammed 179 customers in the PPL service territory
The settlement would resolve I&E's complaint.
The settlement provides that none of the provisions in the settlement shall be considered or shall constitute an admission, a finding of any fact, or a finding of culpability on the part of Verde
Under the settlement, in addition to the $1 million civil penalty, Verde is to also refund to each customer identified in I&E's complaint, who was actually enrolled with Verde, a refund equal to their first two months of electricity supply charges, less any amounts previously refunded to that customer. For customers who allege unauthorized enrollment by Verde, and who were actually charged and paid early termination fees (ETF) to their prior supplier, Verde is to refund those ETFs, upon receipt of proof of payment by customer.
The refunds are applicable to 179 customers identified in I&E's complaint
The Pennsylvania Office of Consumer Advocate argued that the settlement is insufficient
Among other things, OCA argued that the settlement ignores the potential pool of customers who were explicitly identified in a PPL Report or others who may have experienced similar conduct. OCA said that the Settlement also leaves no potential remedy for the 110 customers that complained to PPL that they were slammed by Verde, but Verde was unable to find in its records. OCA also objected to limiting the refund to two months worth of service
However, the ALJ found that the I&E complaint and settlement are specific in scope, and any similarly affected customers may file their own complaint with the PUC
"I agree with Verde that this Complaint and associated Settlement are limited in scope by the specific allegations made by I&E in the formal Complaint. This matter pertains to the 179 customers specifically identified by I&E. Moreover, if there are any customers outside of the 179 customers identified by I&E and who are not covered by the terms of the Settlement, then any such customer is free to bring their own Complaint against Verde," the ALJ said
The ALJ does recommend a slight modification to the settlement such that Verde will be ordered to notify the customers identified in the complaint who alleged unauthorized enrollment of the potential refund of the ETF, and the steps required to secure the refund (in contrast, unlike the ETF reimbursement which customers must actively seek and hence the ALJ's proposed notice requirement, the settlement provides Verde will automatically provide the stated refunds of generation charges to the affected customers)
Concerning the two-month limit on generation charge refunds, the ALJ said, "The OCA also challenges the adequacy of the two-month period for refunds instead of the entire period that Verde served the customers. However, I agree with Verde that the methodology outlined in the Settlement is consistent with the Commission’s regulation regarding customer dispute procedures which provide in pertinent part: 'When the customer’s dispute has been filed within the first two billing periods since the customer should reasonably have known of a change of the EGS and the dispute investigation establishes that the change occurred without the customer’s consent, the customer is not responsible for EGS bills rendered during that period.'"
The ALJ further noted that to the extent that the OCA believes that the refund terms of the settlement, or any of the terms of the settlement, are deficient and do not adequately address the claims raised in the complaint, the OCA is free to bring its own complaint on these issues
The ALJ would also not adopt OCA's recommendations for further limits on Verde's marketing or requirements for resumption of the channels cited above
The ALJ further said, "it is important to consider that the Settling Parties invited the OCA to comment on the Settlement on several occasions. The OCA could have raised all of the aforementioned concerns at that time, and I&E and Verde could have revised the Settlement to address these concerns. Instead, by its own volition, the OCA continually declined to participate in the settlement discussions. Accordingly, I do not find that there is any reason to modify any of the terms of the Settlement."
Verde provided the following statement concerning the matter: "Verde Energy doesn’t have any additional comment on the proposed settlement as we believe it speaks for itself."