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Retail Supplier To Pay $85,000 Forfeiture Under Settlement Concerning Rebate Program, Mailer

May 31, 2023

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Copyright 2010-23
Reporting by Paul Ring •

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SmartEnergy Holdings, LLC (SmartEnergy or the "Company") would agree to a forfeiture of $85,000 under a stipulation with Staff of the PUC of Ohio (Staff) to resolve alleged violations arising from a mailer concerning a $100 rebate

The stipulation would resolve a Staff Notice of Probable Non-Compliance (PNC) dated September 6, 2022, and an updated PNC dated January 12, 2023, issued to SmartEnergy Holdings, though, unlike in other stipulations filed at PUCO in other proceedings, copies of the PNCs were not published contemporaneous with, or as part of, the filing of the SmartEnergy stipulation

SmartEnergy provided the following statement concerning the matter:

"SmartEnergy has successfully reached a resolution with the Public Utilities Commission of Ohio (PUCO) staff, addressing specific concerns regarding the marketing and enrollment procedures for our customers in Ohio.

"SmartEnergy takes issues of this nature very seriously and acknowledges the commendable efforts made by the PUCO staff. We collaborated with the PUCO staff to address all issues raised, leading to a mutually satisfactory resolution.

"We extend our gratitude to the PUCO staff for their proactive engagement and cooperation in helping us resolve this matter."

--- Statement from SmartEnergy

As stated in the stipulation, "During a period that included calendar year 2022, the Company offered a rebate to Ohio consumers who enrolled with the Company for the supply of retail electric service and remained a customer for at least six months. The rebate and eligibility criteria were described in a postcard mailed to consumers similar to the form of the attached Exhibit A [included in the stipulation]."

The original mailers did include a statement that, "This confirms your P.I.N. for a $100 Visa Gift Card. It’s our thank you after you enroll in and receive 6-months of SmartEnergy electricity supply – at a fixed rate – which can protect you from rising rates."

While the Staff PNCs were not available, based on redlined changes made to the mailers, it appears Staff's concern was one or several of the following: (1) Staff may have been concerned that the mailer's design could have suggested that the $100 rebate was for enrollment, regardless of the duration of service; (2) Staff may have been concerned that the mailer could have suggested that customers would automatically receive the $100 rebate, and would not need to go through a claims process

On September 6, 2022, Staff issued a Notice of Probable Non-Compliance (PNC) expressing "concerns" arising from the rebate program, the stipulation states

While the PNCs were not available, redlined changes to SmartEnergy's marketing materials concerning the rebate program offer insight into Staff's concerns

One change is the elimination of the following text from the outside of the mailer

$100 Visa Gift Card
For Addressee Only

Additionally, text in the mailer was added to state, "$100 Visa Gift Card for enrolling and enjoying 6 months of SmartEnergy electricity supply". The prior mailer had stated, "$100 Visa Gift Card for enrolling in SmartEnergy electricity supply".

Additionally, text in the mailer was added to state, "We look forward to sending your $100 Visa Gift Card once you claim it." The prior mailer had stated, "We look forward to sending your $100 Visa Gift Card."

The stipulation notes that SmartEnergy ceased all direct mail advertising in Ohio as of February 9, 2023. SmartEnergy may resume direct mail advertising upon execution and filing of the Stipulation.

The stipulation states that SmartEnergy has revised, and Staff has reviewed, the following materials:

a. Ohio standard contract;

b. Postcard describing the Company’s Ohio electricity offer and rebate program; and

c. Ohio sales script and verification questions.

The stipulation provides that SmartEnergy will undertake the following actions to ensure that rebates are distributed to as many qualified customers as possible

a. For purposes of this Stipulation, the Company will assume that all inbound telephone enrollments during 2022 were initiated by consumers in response to direct mail solicitations reflected by, or substantially similar to, the example shown in Exhibit A of the stipulation (described above).

b. The direct mail solicitations referenced immediately above offered a rebate (in the form of a VISA cash gift card) to consumers who enrolled with the Company and remained a customer for six months, and claimed the rebate by submitting a completed claim form and copy of their electric bill to the Company. Some eligible customers have claimed their rebate but many have not.

c. SmartEnergy will identify all consumers who enrolled by inbound telephone during 2022 and received service from the Company for at least six consecutive months but have not claimed their rebate. SmartEnergy will mail a written notice to such customers in the form of the Exhibit E-1 (current customers) or E-2 (former customers), attached to the stipulation, to remind them of their potential eligibility to receive a rebate. Upon receipt of the information requested from the customer to confirm eligibility, SmartEnergy will process and distribute the rebate. These customers will not be required to have SmartEnergy as their current supplier.

d. Customers who enrolled during the latter months of 2022 will not become eligible to receive a rebate until June or July 2023. The Signatory Parties also recognize that the Commission needs time to consider this Stipulation before approving it. Therefore, subject to Commission approval of this Stipulation, SmartEnergy will commence mailing the notices described in Exhibit E-1 and E-2 no earlier than August 1, 2023 and conclude the mailing of all notices by not later than August 15, 2023.

e. By not later than October 1, 2023, the Company will submit a report to Staff identifying: (i) the number of letters mailed; (ii) the number of responses received; (iii) the number of rebates approved; and (iv) the number of rebates rejected, if any, along with the reason for rejection.

The stipulation provides that, if, subsequent to the effective date of the Stipulation, the Company engages in sales or marketing that features a rebate, incentive, or other benefit that must be claimed by the customer through an affirmative act subsequent to the enrollment (such as calling the Company, completing and mailing a form, and similar actions), the Company will include the following language in the renewal notices applicable to such contacts:

Don’t forget to claim your incentive!

We also want to remind you that after you have been using SmartEnergy for six months, you can claim your incentive. If you are current on your [utility name] bill and are still enrolled with SmartEnergy at that time, you are eligible for an [incentive]. Please send us your [utility name] statement showing SmartEnergy as your electricity supplier. Upon review of your account, we will send you the gift card within 4-6 weeks of receipt.

Case 23-0601-EL-UNC


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