Pennsylvania Recommended Decision Would Deny License to Broker Applicant

A recommended decision from a Pennsylvania Administrative Law Judge (ALJ) would deny the application of J. Andrews Associates, Inc. d/b/a Seven-Utility Management Consultants LLC (SUMC) for an electric broker license, finding that the applicant, "is neither fit nor able to provide the level of service that the citizens of this Commonwealth deserve."

Seven-Utility Management Consultants LLC's application had been protested by Keith Bulls, a former employee who had filed a breach of contract suit against SUMC.

"While any testimony given by a former and admittedly disgruntled employee must be taken with a grain of salt, the sheer amount of the evidence available against the Applicant requires the recommendation that this Application be denied," the recommended decision states.

The recommended decision is not final, and parties may file exceptions to the recommended decision prior to a final order from the Pennsylvania PUC.

In particular, the recommended decision would conclude that, "The Applicant expended very little effort in providing accurate information on the initial [application] form."

"It was not until the Protest was filed that Applicant admitted that the information was incomplete or inaccurate. Filing an Amended Complaint works in favor of the Applicant's attempt to mitigate the errors; waiting until the Protest was filed in order to do so, as well as attempting to provide another amendment at the evidentiary hearing, weighs against the Applicant's credibility," the ALJ said.

The ALJ would conclude that the information omitted but then admitted, "included the identification of numerous affiliates and lawsuits, as well as the open admission that Applicant has been operating in Pennsylvania without a license since at least 2009."

"Applicant's claim that it just did not believe that the Commission sought information that was not directly relevant to the electric brokerage business is belied by the wording on the form itself," the ALJ said.

More specifically, according to the recommended decision, SUMC admitted that the company has two other affiliates not mentioned in the original application: Seven-Utility Management – Telecom, and Seven-Utility Management – Energy Conservation and Engineering Services.

Additionally, the recommended decision notes there were additional predecessors or other companies which may or may not be affiliated with SUMC that were cited on cross examination.

"The number of 'overlooked' affiliates and predecessors amounts to more than simple oversight. While the omission of this information could be either careless or intentional, in either case, the sloppy and incomplete manner in which the form was filled out – especially when an Amended Application had to be filed once -- does not weigh in favor of a finding that this Applicant is willing to 'conform to the provisions of this title and the lawful orders and regulations of the commission,' 66 Pa. C.S. § 2809(b), and in fact, supports a conclusion that the opposite is true," the ALJ said.

The ALJ would also find that despite the "clear language" on the application regarding the disclosure of legal actions, "It is undisputed that the original Application did not list any suits."

An amended application listed three suits, but the ALJ said that on cross-examination, Jason Mass, SUMC's CEO, admitted that there were additional suits against him personally.

"While Mr. Mass is correct that these matters may have little to do with his ability to provide brokerage services, he is not correct that they do not matter to the evaluation of his Application. An Applicant's lack of candor and unwillingness to provide complete information is indicative of his cooperation and tendency to follow the rules and laws of the forum," the ALJ said.

Furthermore, the ALJ states that, "Mr. Mass testified that he realized that he needed a brokerage license to operate in Pennsylvania about two weeks before he filed his Application. He filed his original application on May 9, 2011. However, he entered into a contract with the City of Harrisburg on July 27, 2009, and stated in a Request for Admissions that the City of Harrisburg understood that he was in the process of obtaining the necessary license when he entered his contract with them. Tr. 166. He also entered into a contract for brokerage service with a client in Auburn, Pennsylvania, May 9, 2011. Tr. 167."

"This testimony is inconsistent. If Mr. Mass knew in 2009 that he needed a license and it was not filed until 2011, he could not have only realized that he needed a license about two weeks prior to filing for one," the ALJ said.

"Mr. Mass admitted that a page on his website indicates that his company is ready to assist in negotiating the best electricity and natural gas contracts possible in Pennsylvania. Tr. 169; OCA Ex. 3. In other words, for the last year since he filed this Application, he continued to hold himself out as available to do business in Pennsylvania," the ALJ said.

"This behavior is not consistent with a finding that Applicant would be likely to follow the laws of the Commonwealth in offering brokerage services," the ALJ would conclude.

The ALJ also cited SUMC's request for a reduced security bond, and treatment of a debt to Mr. Bulls, as weighing against a finding that SUMC is financially fit to be licensed.

Docket: A-2011-2241747