Pennsylvania AG Seeks to Revoke Licenses of Five Retail Suppliers

The Pennsylvania Attorney General and Office of Consumer Advocate have filed complaints at the PUC against five retail electric suppliers, seeking license suspension or revocation, alleging various deceptive practices and other violations of statute and PUC regulations.

The AG filed complaints against Blue Pilot Energy LLC, Energy Services Providers Inc. d/b/a Pennsylvania Gas & Electric (USG&E); Hiko Energy LLC, IDT Energy Inc.; and Respond Power LLC.

Common to all complaints were the following alleged violations:

• Customer complaints "indicated" that customers believed their rates promised savings versus the Price to Compare or that their rate would never be higher than the PTC, and/or that customers believed their rate was guaranteed, which prompted the AG to allege that agents made misleading or false promises of savings.

• Suppliers' disclosure language regarding the conditions under which the rate would vary (which generally amount to a general statement rates would vary with wholesale prices) allegedly did not meet the PUC disclosure requirements because such language allegedly failed to adequately state the conditions of variability and the limits on price variability

• Prices charged by suppliers (ranging from 34¢ to 50¢, depending on supplier) were alleged to be non-confirming with the suppliers' disclosure statements and description of rate variability, as the AG alleged the cost to serve an average residential heating customers based on PJM spot prices was 23¢/kWh. RetailEnergyX.com takes a look at the calulcation used to arrive at 23¢ in a post today (click here).

• Alleged violations of the state's Telemarketer Registration Act for alleged failure to reduce telemarketing agreements to writing and to receive the customer's signature on such written materials

• Alleged failure to address complaints in "good faith" as required, due to alleged inability of customers to reach suppliers for assistance

Additional allegations specific to one or more suppliers include:

• Allegedly misleading or deceptive Welcome Letter or similar ad/collateral materials (specific to IDT Energy, USG&E, and Respond Power). The AG alleged various statements in the welcome letter were misleading in light of the service actually provided to customers. RetailEnergyX.com takes a look at the specific statements prompting such allegations in a post today (click here).

• Alleged misrepresentation of sales agents who are alleged to have identified themselves as from the electric distribution company (specific to Respond Power)

• Alleged instances of slamming (specific to USG&E, Hiko, IDT Energy, and Respond Power)

• Alleged failure to provide a customer with a price in response to customer inquiry, in alleged violation of 52 Pa. Code § 54.43(1) (specific to USG&E).

In addition to license suspension or revocation, the AG is seeking to have the suppliers refund customers any charges in excess of the Price to Compare for the applicable period of service, as well as a refund of any other charges incurred (e.g. termination fee, etc.).

While many of the alleged violations described above are argued to be violations of certain PUC codes, the AG also broadly alleges violations of the Unfair Trade Practices and Consumer Protection Law and Telemarketer Registration Act.

However, with respect to the Unfair Trade Practices and Consumer Protection Law, the PUC has previously ruled (and a serendipitously timed initial decision issued Friday would affirm this precedent, click here for details) that it does not have jurisdiction to enforce the Unfair Trade Practices and Consumer Protection Law. Although the PUC does require suppliers to comply with statutes including the Unfair Trade Practices and Consumer Protection Law, the PUC has said that it can only enforce its own consumer protection regulations (such as those found at 52 Pa. Code Ch. 54, 56 and 111). Presumably, enforcement of statutes must occur through civil complaints at state courts.

Therefore, it will be interesting to see how the PUC addresses these complaints, and if allegations regarding the Unfair Trade Practices and Consumer Protection Law (as well as the Telemarketer Registration Act for similar reasons) are left to the courts.