Retail Supplier Would Make $141,000 Charitable Donation, Agree to Door-to-Door Changes Under Settlement

July 17: Updated with Palmco statement

A settlement between Palmco Power CT LLC and the Prosecutorial Unit of the Connecticut Public Utilities Regulatory Authority requires Palmco to make a $141,000 donation to Operation Fuel and changes to its door-to-door marketing practices to resolve an investigation into its marketing activities.

The Office of Consumer Counsel and the Connecticut Attorney General oppose the settlement and asked that PURA continue with a hearing on the matter

PURA had previously directed Palmco to immediately cease all door-to-door marketing activities after allegations that a Palmco agent represented themself as from the utility and that a Palmco agent indicated that the customer's electric service was subject to a shut off notice. PURA had also raised concerns regarding minimum usage levels required from Palmco for customer enrollment and service

The settlement provides that the $141,000 donation shall be made in installments, and that, "The Parties agree that the amount of the Donation has been determined as a result of negotiations that took into account the different levels of severity for the twenty-seven (27) complaints PURA has received since 2012 regarding Palmco's door-to-door marketing, and other alleged violations including the two (2) complaints that gave rise to the Cease and Desist Order, and that the Donation takes into consideration other factors, including, among others, that some complaints do not involve door-to-door marketing and some complaints suggest no fault on the part of Palmco."

The settlement permits Palmco to resume door-to-door marketing at any time provided that Palmco makes several remedial measures in its door-to-door marketing for a period of 15 months, including obtaining third party verification (TPV) for all door-to-door sales in which a residential customer enrolls with Palmco.

The settlement also requires Palmco to conduct retroactive compliance reviews of no less than 30% of the Palmco door-to-door sales completed by each third-party marketing company working for Palmco and to conduct compliance reviews of no less than 50% of the Palmco door-to-door sales completed by each sales agent who is hired by a Palmco third-party marketing company subsequent to the resumption of door-to-door marketing

The settlement further requires Palmco to conduct training and testing of sales agents.

Third-party marketing companies conducting door-to-door marketing on behalf of Palmco shall complete pre-employment background checks, in accordance with applicable law, of any sales agents engaged to market door-to-door for Palmco, the settlement provides

As noted above, one of the issues raised was Palmco's past practice of declining to enroll a retail electric customer solely because the customer's annual historical usage falls below a specific minimum consumption threshold. The settling parties agree that, assuming a customer is notified of such policy at the time of enrollment, the customer is timely notified if he or she does not satisfy the minimum consumption policy, and Palmco does not use this policy to discriminate in any way, the minimum consumption policy does not expressly violate Connecticut law.

Nonetheless, because the settling parties wish to settle the matter in its entirety by including in this settlement agreement a proposed resolution of Palmco's past practice with respect to the minimum consumption policy, Palmco agrees that it will voluntarily cease such practice until the Authority decides the appropriateness of any supplier's minimum consumption policy in Docket No. 14-07-20RE01. With respect to any claims against Palmco arising from Palmco's past practice of its minimum consumption policy, the settling parties agree that their agreement settles such claims.

Palmco provided matters with the following statement:

“We are in the process of reaching an agreement with the Connecticut Public Utilities Regulatory Authority. As a family-owned and operated company, we’re always looking for ways to provide the highest quality service possible and we are looking forward to continuing to serve our customers in Connecticut.”

Docket 10-01-24RE01