Regulator to Require Notice of Customer Assignment to Inform Customers of Investigations into New Supplier

In what appears to be an uncommon, if not novel, requirement, a notice to be sent to customers of Hop Energy concerning the assignment of their contracts to Public Power must inform the customers of various regulatory actions taken against Public Power, the Connecticut PURA said in a June 17 letter to Hop Energy.

A June 12 letter from Hop Energy to PURA had stated that the Hop Energy customers would be transferred to Public Power

In commenting upon a draft customer notice submitted by Hop Energy concerning the assignment, PURA said that the notice, at minimum, must inform customers that Public Power, LLC:

"(1) was the subject of an investigation in Docket No. 11-10-06, PURA Investigation of Public Power, LLC, where Public Power was ordered to issue $41,767.26 in customer credits and make a charitable contribution of $6,000 to Operation Fuel Inc. in lieu of a Notice of Violation and Civil Penalty being issued by the Authority;

"(2) is currently being investigated by the Authority in Docket No. 13-02-08, PURA’s Investigation Into Public Power, LLC’s Trade Practices, for a spike of slamming complaints received by the Authority;

"(3) is currently being investigated by the Authority in Docket No. 07-06-13RE03, Application of Public Power & Utility for an Electric Supplier – Investigation Re: Possible Transfer of License, in which determination will be made as to whether Public Power’s license had effectively been transferred without the Department’s prior approval as required pursuant to Conn. Gen. Stat. §16-245(j); and

"(4) Public Power’s license is currently being reviewed in 07-06-13RE04, Application of Public Power, LLC for an Electric Supplier License – 5-Year License Review, where the Authority will determine whether Public Power will be allowed to continue to operate as an electric supplier in Connecticut."

"In addition, the notice must inform each customer, in bold print: (1) the customer’s current type or plan of service (e.g., fixed or variable), (2) the rate the customer is being charged by HOP, (3) the expiration date of the customer’s fixed rate, if applicable, (4) the exact date the customer will be switched to Public Power, (5) the type or plan of service and the rate the customer will be charged by Public Power, and the expiration date of the fixed price, if applicable. HOP is required to also inform customers that they can choose another supplier prior to the switch date if they do not wish to receive service from Public Power, and that information about electric suppliers is available at energizeCT.com. All customer notice letters shall be submitted to the Authority for approval prior to distribution," PURA said.

Crius Energy, parent of Public Power, provided the following statement to Matters:

"We look forward to soon serving HOP customers under the Crius Energy family of brands. Having recently completed a similar transaction in other states without a requirement like this one, we believe there may be a misunderstanding. We are actively working with PURA and HOP Energy and look forward a smooth transfer with minimal disruption for HOP customers."

While Matters has not previously seen any similar requirement, we do note that in approving a recent notice to be sent to Dominion Retail electric customers regarding their assignment to Reliant Energy Northeast, PURA, in a decision on the notice, made note that, "Reliant has not been the subject of any investigation or legal proceeding in any other states or before any federal agencies," so while the Hop Energy notice may be the first to list any investigations, it is not the first time PURA has considered the issue.

Notably, while Reliant Energy Northeast has not been subject to investigation in other states, its affiliate Energy Plus, in Connecticut, was subject to a much-publicized and recently settled petition for an investigation from the OCC and AG. We wonder, if Crius had elected to move the Hop customers to Viridian instead of Public Power, would PURA be requiring the same investigation disclosures in the notice?

However, regardless of the specific circumstances of the Hop Energy case, based on both the Hop Energy and Dominion Retail proceedings, it appears that a supplier's investigations and compliance record will be part of PURA's review of any assignment processes and customer notice going forward, so acquiring suppliers in Connecticut should be aware of this.