New York Threatens to Drop Hammer On Retail Supplier, Issues Show Cause Order on Suspension/Revocation

The New York PSC has issued a show cause order to Liberty Power Holdings LLC directing Liberty Power Holdings LLC to show why it should not be precluded from enrolling new customers until the Commission orders otherwise and why its eligibility to act as an ESCO in New York State should not be revoked.

The PSC issued the show cause order after it, "received hundreds of customer complaints about the marketing practices of Liberty Power Holdings LLC (Liberty Power, the company)."

"Even after DPS Staff’s (Staff) attempts to intervene, including instructions to Liberty Power on specific ways in which Liberty Power could improve its marketing practices to avoid customer confusion and harm, Liberty Power continues to exhibit a pattern of marketing that appears to include misrepresentations and unauthorized account transfers," the PSC said in its show cause order.

The PSC's action comes as the Commission is reviewing the performance of retail choice, and considering additional consumer protections.

The PSC said that in 2012 the Department received 186 initial complaints against Liberty Power. In 2011 it had received only 26 initial complaints against Liberty Power

The PSC said that the majority of the complaints against Liberty Power were (a) that Liberty Power had engaged in misleading marketing practices; (b) that Liberty Power sales representatives misrepresented their identity; or (c) that Liberty Power slammed customers.

Leah Lopez, Chief Operating Officer of Liberty Power, provided the following statement:

"Liberty Power has been operating in New York as a licensed ESCO in good standing since 2001. In late 2011, we began marketing to residential customer in New York to provide retail electricity choice to homeowners so they could receive the same benefits our small business owners enjoyed. We recognize that our increased sales and marketing efforts to this new customer segment requires higher levels of quality controls and quality assurance and have worked with the Public Service Commission (PSC ) to adopt best practices and in fact we have seen a material reduction in the number of complaints as a result of that collaboration. We are a business that has been built on being trustworthy and fair and will not tolerate poor marketing practices. We are extremely troubled about the NY PSC Order and will take immediate action to address their concerns."

The PSC said that on September 21, 2012, Staff sent a letter to Liberty Power confirming the history of notices Staff had provided to Liberty Power in response to the complaints against it and to confirm Liberty Power’s stated commitment to bring its marketing performance into compliance. The PSC said that the September 21, 2012 letter acknowledges that, after Staff notified Liberty Power on July 18, 2012 and September 13, 2012 about the problems Staff had identified, "Liberty Power committed to the following measures to address these marketing complaints: (1) increasing its supervisory staff in the field to monitor solicitations; (2) increasing supervisory oversight of telesales; (3) improving its training efforts, including the addition of a daily morning training session with its marketers; (4) waiving early termination fees (EFT) when customers cancel contracts; and (5) making the visibility of ESCO Consumer Bill of Rights and the Company’s Logo on enrollment forms more prominent."

"Despite Liberty Power’s promised changes in training, marketing and monitoring procedures, Staff continued to receive complaints against the company. As a result, DPS began a detailed review of all complaints received against Liberty Power since September 21, 2012. Staff’s investigation found that in fact, Liberty Power appeared to be continuing to violate the UBP notwithstanding the commitments, summarized above, as described in the September 21, 2012 letter. Staff’s investigation indicates that Liberty Power’s hiring, training, and marketer oversight practices have been inadequate in preventing slamming, and misleading and deceptive marketing," the PSC said.

The PSC said the various customer complaints alleged that agents for Liberty Power Holdings, among other things:

• Represented themselves as from ConEdison

• Represented herself as from the City of New York

• Switched a customer's service using authorization which was later not verifiable as the customer of record

• Continued a sale or did not provide a translator when the customer's English was "insufficient"

Case 13-E-0062