Retail Supplier Says PUC's Order Lacks Evidence Supporting Broad Customer Re-rates; PUC Staff Cites PUC's Own Complaint Authority

In a brief, RPA Energy, Inc. d/b/a Green Choice Energy argued that the PUC of Ohio has not found specific violations supporting re-rates for the entirety of a broad class of customers, while PUCO Staff in a brief said a court has already affirmed broad re-rates, with the remand addressing only contradictory periods of time listed in a PUC order concerning such broad re-rates

As previously reported by ECM (see background here), PUCO had ordered RPA to pay a $1.44 million forfeiture related to various marketing violations, but the Ohio Supreme Court found that PUCO's order did not articulate how PUCO arrived at the $1.44 million figure, and the Court remanded the case back to PUCO for PUCO to explain its prior decision.

RPA and Staff later entered into a partial stipulation under which RPA would pay a forfeiture of $500,000 to settle the amount of the forfeiture previously directed by PUCO, with the issue of customer re-rates left to briefing and adjudication by PUCO on remand

See details of the settlement here

The parties agree that if RPA were ordered to re-rate all customers who enrolled in May and June 2021, such re-rates would total approximately $1.28 million and cover 3,904 electric customers and 2,049 gas customers

PUCO Staff recommends that the Commission "clarify" that PUCO is ordering RPA to re-rate (1) all of the customers who enrolled with RPA through door-to-door or telephonic means from May 1, 2021 through June 30, 2021; and (2) all of the customers who filed a complaint against RPA with the Commission, RPA, or any other entity disputing their enrollment with RPA on or after February 1, 2022 to present

RPA argued that Staff's proposed re-rates are not tied to any finding of a specific violation or harm to a specific customer, and thus are an, "unlawful penalty in disguise."

RPA argued that a re-rate, or restitution, "is a compensatory remedy that presupposes a customer who was harmed."

"A lawful, compensatory rerate requires the Commission to identify which customers were harmed and by which violation," RPA argued

RPA argued that, "The Court has already held that the record does not permit the Commission to make those connections: the spreadsheet on which the Commission relied 'contains 75 rows of case numbers and 48 columns' with 'no key,' such that 'it is impossible ... to determine how the commission calculated the total number of violations.'"

RPA said, "A blanket remedy adopted because individualized proof is lacking is not a permissible exercise of the restitution power; it is a substitute for the proof the exercise of this power requires."

However, Staff argued that PUCO's authority to order re-rates to a broad group of RPA's customers was already affirmed by the Ohio Supreme Court in the remand decision

Staff said, "The Court was clear in its Opinion: '[t]he commission ordered RPA to rerate its consumers even if the consumer did not file a complaint with the commission. RPA contends that the Commission lacks authority to order it to rerate consumers who did not file complaints. We disagree.'"

Staff said, "The Court goes on to state that R.C. 4928.16(A) and 4929.24(A) authorize the Commission to bring its own complaint and is not limited to complaints brought by consumers."

Staff said, "The issue on remand, as addressed by the Court, were contradictory periods in the Commission’s Order. The Court 'affirm[ed] the commission’s authority to order consumer rerating' and 'remand[ed] this matter to the commission with instructions to clarify which consumers it is ordering RPA to rerate.' There are no other instructions and no other parameters established by the Court in regard to rerates for the Commission to address in this remand. The only clarification the Commission needs to provide is what consumers it is ordering RPA to rerate. The Court did not request that this issue be relitigated, nor that RPA be given another opportunity to contest the Commission’s authority to order rerates."

However, RPA said that RPA is not contesting PUCO's authority to offer class-wide relief where evidence supports such finding, but that such evidence has not been shown for the May and June 2021 customers

RPA said, "RPA’s position is not that a rerate defined by a period can never be lawful. Where the record establishes a violation that is itself class-wide -- for example, evidence that a non-compliant form contract, or a uniformly defective disclosure, was used for every customer enrolled during a given period -- the period may serve as a reliable proxy for a proven violation that affected each of those customers, and a period-wide rerate may be appropriate. In that circumstance, the calendar line is not arbitrary; it tracks the reach of the violation."

"This record is not that. The violations here are individualized acts involving particular consumers, and the two theories that might have made a violation categorical were expressly not found," RPA said

RPA said that rerates should be limited to the group of customers referenced in Paragraph 5 of the RPA-Staff Stipulation. Such paragraph states: "With respect to the enrollments referenced in the spreadsheet previously admitted into evidence as part of the prefiled testimony of [Staff witness], RPA previously issued credits or refunds to this subset of consumers totaling approximately $3,984, as reflected in the call center files and other record evidence in this proceeding. RPA stipulates that to fully re-rate these consumers would require total additional payments of approximately $3,485."

Case 22-441-GE-COI