Retail Supplier Would Make $20,000 Charitable Contribution To Resolve Alleged Contract Expiration Notice Non-Compliance

Direct Energy Services, LLC would contribute $20,000 to Operation Fuel to resolve allegations that it failed to provide proper notice to some of its Connecticut customers regarding the expiration of their fixed price term, and the price that would be effective after such expiration, in advance of the contract expiration.

A draft Connecticut PURA decision would accept the $20,000 contribution to resolve the matter. The draft also notes that Direct previously provided refunds to the affected customers.

PURA had been reviewing Direct's compliance with Conn. Gen. Stat. §16-245o(g)(1) which provides, "Between thirty and sixty days, inclusive, prior to the expiration of a fixed price term for a residential customer, an electric supplier shall provide a written notice to such customer of any change to the customer’s electric generation price."

While Direct Energy provided notices under the required timeline to certain fixed rate customers who were to rollover to a variable rate, PURA's draft order would find such notices to be non-compliant because they did not list the specific rate onto which customers would rollover.

"[T]hese notices did not identify the change in generation price that would go into effect at the end of the initial fixed rate term. Instead, the ... notice informed customers that they would no longer be served under a fixed rate plan but would be moved to a month-to-month variable rate plan. This letter is meaningless to electric generation customers because it merely informs them that their rates could decrease or increase with no certain terms," the draft states

The draft would also conclude that a subset of about 1,400 customers did not receive a timely renewal notice due to backoffice system problems

The draft notes that, "In this case, Direct Energy issued refunds to customers before being ordered by the Authority to do so, but only after the Authority opened an investigation. Nevertheless, the Authority acknowledges that Direct Energy initiated proper steps to self-mitigate and the Company is also willing to make a contribution to Operation Fuel to resolve this matter."

Direct Energy provided the following statement to EnergyChoiceMatters.com:

"Direct Energy agrees with the PURA’s draft decision on this matter."

Docket No. 06-03-06RE03