Pa. PUC Rejects $92,000 Settlement With Retail Supplier As Insufficient -- EnergyChoiceMatters.com

Pa. PUC Rejects $92,000 Settlement With Retail Supplier As Insufficient

June 15, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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The Pennsylvania PUC rejected a proposed settlement between Great American Power, LLC ('GAP' or 'Company') and the PUC's Bureau of Investigation and Enforcement ('I&E') under which GAP agreed to pay $92,500, and agreed to a one-year moratorium of telemarketing through third-party vendors, to resolve alleged misleading and deceptive telemarketing calls, and related alleged violations

The settlement had been first reported by EnergyChoiceMatters.com in January.

See background on the settlement's terms and alleged behavior addressed by the settlement in our prior story here

Great American Power provided the following statement concerning the matter:

"Great American Power is disappointed that the Pennsylvania Public Utility Commission chose to reject a fair resolution of allegations raised by the Bureau of Investigation and Enforcement on the basis that the Settlement was insufficient to deter bad behavior. GAP takes all customer concerns seriously and is constantly improving its business model to better serve its customers. As a result of its commitment to excellence and the improvements it has made in the years since the allegations referenced in the Settlement, GAP has been and continues to be an asset to the Pennsylvania competitive market by not only remaining free from any serious allegations since but also by saving Pennsylvanians hundreds of thousands of dollars compared to what they would have been charged with their local utility. GAP is evaluating its options but will continue to seek ways to improve its business and provide a positive experience for its customers and the public."
--- Statement from Great American Power

The PUC unanimously adopted a motion from Vice Chairman Stephen DeFrank and Commissioner John Coleman to reject the settlement

DeFrank & Coleman moved for rejection because of, among other reasons, "the serious/egregious nature of the allegations."

"Upon review, the allegations are extensive and involve deceptive and misleading conduct, which warrants a higher penalty," DeFrank & Coleman said

DeFrank & Coleman noted that, as noted in our prior story, the alleged behavior included, "(1) slamming; (2) customer enrollment under false pretenses; (3) failure to identify; (4) misrepresentation as an EDC or another EGS; (5) providing false information regarding the status of other EGSs, such as suggesting that the EGS was going out of business; (6) providing incorrect or false information regarding the rate, distribution charge, or customer charge; (7) spoofing the phone number of another company or business on the caller ID; (8) suggesting or stating that the customer must switch suppliers; (9) misrepresentation of the enrollment process; (10) making false monetary promises, such as offering a gift card or a rebate/refund; and (11) harassing potential customers with voluminous phone calls, even after potential customers requested no further calls."

DeFrank & Coleman further said that remedial measures under the settlement are not sufficient

"[T]he allegations related to a third-party telemarketing vendor are not adequately addressed by the remedial measures in the Settlement. Although the Settlement provides that GAP will not use a third-party telemarketing vendor for a year, the third-party vendor responsible for the alleged violations was not identified, and the Settlement does not prohibit the Company from using the same vendor in the future. Moreover, it appears that GAP failed to appropriately monitor the actions of its vendor, and the Settlement does not address what monitoring protocols will be put in place in the future when or if GAP resumes using a third-party vendor," DeFrank & Coleman said

DeFrank & Coleman further cited GAP's compliance history as a reason to reject the settlement

DeFrank & Coleman said, "According to BI&E in its Statement in Support, it is aware of two prior settlements with GAP related to the Company’s marketing and sales practices. The first settlement arose out of an informal investigation that was a follow-up to a Commission Order in an individual customer complaint case.4 Specifically, the informal investigation addressed allegations that GAP engaged in improper telemarketing of EGS services. BI&E reached a settlement with GAP, which was approved by the Commission in April of 2017. Under the terms of the settlement, GAP agreed to pay a civil penalty of $18,000 and to implement certain remedial measures, including terminating its relationship with the third-party marketer involved in the allegations. The second settlement arose out of an informal investigation into allegations that GAP engaged in door-to-door marketing without the proper solicitation permits and without notification to the Commission’s Bureau of Consumer Services (BCS). BI&E reached a settlement with GAP, which was approved by the Commission in July of 2019. Under the terms of the settlement, GAP agreed to pay a civil penalty of $13,500 and to implement certain remedial measures."

"We are troubled that this is GAP’s third appearance before the Commission in recent years as an alleged bad actor. With this history, GAP appears to be showing systemic and repeated patterns of behavior. In our view, the alleged behavior serves to undermine consumer faith in Pennsylvania’s retail electric choice market, and it should not be tolerated," DeFrank & Coleman said

"We agree with BI&E that the alleged conduct in this matter 'creates public distrust and self-loathing towards the [EGS] shopping process.' I&E Statement in Support at 10. Accordingly, this factor supports a higher penalty," DeFrank & Coleman said

"We also agree with the OCA that the proposed civil penalty is not sufficient to deter future violations," DeFrank & Coleman said

"Although the overall penalty amount is substantially higher than in the prior cases involving GAP, we do not believe these per-violation penalty amounts are sufficient when considering the serious nature of the allegations and the compliance history here," DeFrank & Coleman said

DeFrank & Coleman explained the per-violation amounts in the settlement as follows: "the Settlement provides for a civil penalty of $92,500 to be paid by GAP. This penalty amount includes a $500 civil penalty for each of the seven alleged violations found during the telemarketing call made to the Commission’s Director of the Office of Competitive Market Oversight and each of the violations alleged in informal complaints filed with BCS and written documentation received from GAP. The penalty amount also includes $75,000 in civil penalties for the violations alleged in the 153 customer care call complaints received by GAP’s call center."

With the rejection of the settlement, the matter will be returned to the Commission’s Bureau of Investigation and Enforcement to take whatever further action may be warranted, the PUC said

Docket M-2023-3020643

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