PUC Orders That Retail Supplier's Financial Security Be Used to Refund Improper Customer Charges

The Maine PUC has ordered that the financial security posted by People's Power and Gas LLC be used to refund customers for an improper monthly fee charged by PP&G, since PP&G, having declared bankruptcy, is in no position to refund the charge.

Starting November 1, 2013, People's changed its terms of service to add a term that would require its customers to pay a monthly basic service charge (BSC) of $25 in addition to the cost of supply.

"This term was not in the previously applicable terms of service ... Chapter 305 requires notice be sent to customers 30 to 60 days prior to a material change taking effect," the PUC said.

Given the "substantial" amount of the monthly charge, the PUC concluded that the $25 monthly fee was a material change, which required prior notice, the PUC said.

"People's did not provide customers prior notice of this change and, therefore, the billing was improper and customers should be refunded the amounts paid," the PUC said.

"People's has filed for bankruptcy, and therefore is not in a financial position to refund the improperly collected charges to its prior customers. Accordingly, in order to provide some restitution to People's customers, it is appropriate to use the available financial security, the PUC said.

The PUC concluded that customers paid $128,071 of inappropriate charges, all from customers in the BHE (Emera Maine) territory.

The PUC holds $100,027.01 in financial security from PP&G. Emera Maine has collected an additional $27,227.07 from customers for the PP&G monthly fee that it, at the Commission's direction, did not forward to People's. Therefore, there is a combined total of $127,254.08 of funds available to reimburse customers.

Given the shortfall in available funds for restitution, the PUC said that the most appropriate way to distribute the monies available is to calculate the percentage of funds available to payments made (99.36%) and apply that rate to the total amount paid by each customer to determine the refund amount. In other words, there are sufficient funds for each customer to receive a refund of 99.36% of the improper monthly fee paid.

The PUC directed that customers be reimbursed via a bill credit from Emera Maine.