Retail Supplier Reaches Settlement With Commission Staff Over Use of Term "Lower Rates", Implied Savings

Staff of the Illinois Commerce Commission said that it has reached a settlement with Nordic Energy Services, LLC regarding the supplier's marketing practices.

Staff said in a report to the ICC that during 2013, the Commission's Consumer Services Division ("CSD") received 37 residential complaints against Nordic. Through November of 2014, however, CSD had recorded 76 residential complaints against Nordic.

"Most of these consumers complained of high rates and alleged they were misled to believe they were going to save money over the utility supply rate when they signed up with Nordic for electric supply service. During February and March 2014, when CSD received 42 and 21 complaints, respectively, Staff began an informal investigation of Nordic's scripts, contracts, and verification processes," Staff said.

"Upon review of the scripts and contracts provided to Staff during the informal investigation, Staff identified a number of potential violations of the Act, Part 412, the Telephone Solicitations Act, and the Consumer Fraud and Deceptive Business Practices Act," Staff alleged. "For example, the sales scripts provided by Nordic stated that Nordic will give customers 'lower rates' and implied savings. Nordic's scripts made no effort to inform the prospective customer that the rate is variable. In addition, Nordic sales scripts obscured the nature of the contact as a sale, and instead characterized the transaction as a simple enrollment in 'the Illinois energy choice program.' It appeared to Staff that the scripts did not properly conform to the requirements of Part 412," Staff alleged.

Part 412 addresses, among other things: (1) minimum contract terms and conditions; (2) telemarketing; and (3) training of retail supplier agents to comply with IL regulations and statutes on energy sales.

"When Staff raised its concerns to Nordic, the Company ceased telemarketing and engaged Staff in discussions with three shared goals: to come into compliance going forward; to establish future marketing conditions for Nordic based upon best practices known by Staff to be most effective in preventing similar allegations from occurring; and to make restitution to affected customers," Staff said.

"Staff has been negotiating with Nordic on an informal basis in an attempt to resolve the problems with Nordics marketing, enrollment and subsequent billing of Illinois customers. As a result of Staffs informal investigation, Staff and Nordic have a reached settlement for the Commission's consideration," Staff reported to the Commission.

The actual proposed settlement has not yet been filed. Staff understands that other parties may intervene in the docket and could potentially object to a settlement.

Nordic Energy Services released the following statement concerning the ICC's consideration of the matter:

"Nordic Energy Services, LLC has worked closely with the ICC Staff regarding this matter, and we expect to reach a resolution in the near future. Nordic appreciates the efforts put forth by the ICC Staff to protect consumers, and takes seriously any issues raised by the ICC. Nordic maintains a rigorous commitment to compliance. We fully support and endorse the ICC Staff's efforts, and are thrilled to work with them to make sure that the Illinois retail energy marketplace focuses on consumer protection."

Docket 15-0139