Retail Supplier to Pay $43,000 to Settle Informal Pennsylvania Investigation of Marketing Practices, Complaints

AP Gas & Electric (PA), LLC, d/b/a APG&E would pay $43,200 under a settlement with the Pennsylvania PUC's Bureau of Investigation and Enforcement (I&E) to resolve all allegations of slamming and related unauthorized actions resulting from an informal investigation into APG&E's marketing practices as an EGS in Pennsylvania.

On June 12, 2012, APG&E self-reported a slamming incident to BCS regarding an occurrence in early May 2012 where an "independent broker" submitted to APG&E a 12-month service contract for a commercial customer in the PECO service territory that was purported to be signed by an authorized representative of the customer.

In addition to the above self-reported incident, various complaints were filed with the PUC's Bureau of Consumer Services relating to the company's marketing practices for its EGS services in Pennsylvania for 2011 and 2012.

I&E was prepared to allege by the filing of a formal complaint that APG&E had violated certain provisions of Title 52 of the Pennsylvania Code as well as the Public Utility Code in that:

• I&E was prepared to allege that the company or an agent or agents of the company failed to obtain "direct oral confirmation or written authorization from the customer to change the EGS" in the process of switching the electric generation supplier on multiple consumer accounts which resulted in physically switching the electric generation supplier of those accounts without the proper authorization of the consumers or without proper verification. If proven, this would be a violation of 52 Pa Code § 57.173.

• I&E was prepared to allege that the action of the company or its agents failed to comply with the Electricity Generation Customer Choice and Competition Act, 52 Pa. Code §§ 54.1, et seq., in that the company or its agents engaged in, "fraudulent, deceptive or otherwise unlawful acts in the process of marketing electric generation supplier services of the Company to Pennsylvania consumers."

• I&E was prepared to allege that the company or its agents failed to comply with the "Do Not Call" provision of the Telemarketer Registration Act, 73 P.S. §§ 2241, et seq.

APG&E neither admits nor denies any of I&E's informal investigation allegations of violations of the Public Utility Code and/or other applicable statutes and regulations.

Under the settlement, APG&E also agreed to additional remedial measures, including:

• If it does not already do so, APG&E agrees to annually send correspondence to its customers confirming that the customer has selected APG&E as his or her electric generation supplier and that APG&E has no affiliation with the customer's public utility

• APG&E will endeavor to fully comply with the Commission's marketing guidelines and will provide Commission BCS staff with all marketing materials to be used in Pennsylvania for review upon request of staff.

• APG&E will provide Commission BCS staff with written notice of any change to the company's practice and procedures related to marketing to consumers for EGS products and services in Pennsylvania and will provide details of those changes upon request of staff

• APG&E will file with the Commission and serve on BCS staff a quarterly report on complaints

The settlement also notes remedial actions already undertaken by APG&E including:

• Since self-reporting the incident which occurred in May 2012, APG&E proactively identified and contacted the independent broker and the specific sales agent responsible for the alleged fraudulent contract. APG&E pulled all contracts brought in by the independent broker and had APG&E customer service representatives call and verbally verify all prior submitted contracts submitted by that independent broker.

• Since Fall 2012, APG&E is no longer engaged with any of the independent brokers doing mass marketing for APG&E in Pennsylvania in 2011 and 2012

• APG&E vetted, found unsuitable and rejected an estimated 24 potential independent brokers that applied to market APG&E products and services in the Northeast in 2011 and 2012.

Docket M-2013-2311811