PUC Approves Settlement Under Which Retail Supplier Will Pay $82,000, Issue Refunds
Relates To Pricing Disclosures, Alleged Slamming
April 15, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Pennsylvania PUC approved without modification a settlement between Liberty Power Holdings, LLC ("Liberty Power") and the PUC's Bureau of Investigation and Enforcement ('I&E') under which Liberty Power will pay $82,800, and provide certain customer refunds, to resolve allegations that its pricing disclosures did not conform to regulations, and to resolve allegations of alleged slamming
The 2019 settlement states, "This matter involves the (actual and attempted) enrollments of residential accounts by one of Liberty Power’s prior independent, third-party vendors whose contract with Liberty Power was terminated shortly after Liberty Power initiated its own internal investigation of the submitted enrollments."
The 2019 settlement states, "BCS received allegations from residential consumers alleging that their electricity accounts had been switched to receive electric generation supply provided by Liberty Power without the customers’ authorizations. Such complaints caused BCS to review the Company’s disclosure statements and marketing materials, in which BCS became concerned that Liberty Power was not marketing an all-inclusive price on a consistent basis."
The 2019 settlement states, "The informal complaints prompted BCS to review Liberty Power’s disclosure statements and other marketing materials, such as Liberty Power’s Door-to-Door Solicitation Disclosures. BCS became concerned that Liberty Power was not consistently representing an all-inclusive price to residential consumers in its marketing materials. At times, Liberty Power marketed an 'Energy Only Rate' on Door-to-Door Solicitation Disclosures, which did not include utility distribution and delivery charges, applicable federal, state and local taxes and charges, or the Pennsylvania gross receipts tax ('GRT'), and was lower than the Liberty Power 'Price to Compare' rate, which was all-inclusive. However, both the 'Energy Only Rate' and 'Price to Compare' rate appeared on Liberty Power’s residential disclosure statements."
The 2019 settlement states that, "Prior to February 10, 2017, Liberty Power’s residential disclosure statements presented two (2) prices to Pennsylvania consumers: (1) a Liberty Power 'Energy Only Rate,' which did not include utility distribution and delivery charges, applicable federal, state and local taxes and charges, or the Pennsylvania GRT; and (2) a Liberty Power PTC, which consisted of the Liberty Power 'Energy Only Rate' plus the Pennsylvania GRT. The Liberty Power PTC was the rate that the Company billed to customers."
The 2019 settlement states that, "I&E’s investigation uncovered several instances where Liberty Power sales representatives, including agents working on behalf of the Company, only wrote or typed the 'Energy Only Rate' on marketing materials that were distributed to consumers, such as the 'Pennsylvania Residential Energy Door to Door Solicitation Disclosures' and the 'Prospective Product Content Label.' The 'Energy Only Rate' was the lower rate as it did not include an amount for the Pennsylvania GRT."
The 2019 settlement states that, "I&E avers that such conduct took place from October 2014 until February 10, 2017, when inclusion of the 'Energy Only Rate' in Liberty Power’s pricing information was eliminated ensuring that Liberty Power’s enrollment and disclosure documents set forth only one price which includes all relevant components of the commodity price charged by Liberty Power to include GRT."
The 2019 settlement states that Liberty Power first became aware of a potential issue with customer enrollments submitted by a third-party vendor on June 10, 2016 following receipt of a consumer complaint, which prompted Liberty Power to conduct an internal investigation of the issue.
As a result of an internal investigation, Liberty Power terminated the vendor's contract with Liberty Power, and voluntarily reported the incident and Liberty Power’s action plan to OCMO on July 18, 2016
The 2019 settlement states that, upon review of data request responses provided by Liberty Power to I&E, I&E concluded that it appeared that approximately seven (7) agents of a third-party vendor used by Liberty Power were allegedly, "involved in a scheme to enroll customers with electric generation supply provided by Liberty Power without proper customer authorizations."
The 2019 settlement states that I&E alleged that the vendor's sales representatives, "fabricated documents and audio verifications to conceal that the customers, in fact, did not consent to switch to Liberty Power."
The 2019 settlement states that Liberty Power’s policies prohibit slamming and require sales agents to act lawfully and in accordance with Liberty Power’s Code of Conduct. The settlement states that Liberty Power has a quality assurance program where third-party verifications are reviewed and field visits are performed. The settlement states that, during the course of Liberty Power’s internal quality control program, the operations of the vendor appeared to be consistent with Liberty Power’s requirements. The settlement alleges that the vendor's, "fraudulent and unlawful conduct circumvented Liberty Power’s policies and procedures."
The $82,800 civil penalty under the adopted settlement represents the following: Fifty-Six Thousand Dollars ($56,000) for the fifty-six (56) customer accounts that were physically switched to and received electric generation supply from Liberty Power; Five Thousand Eight Hundred Dollars ($5,800) for the twenty-nine (29) customer accounts where the process of switching to Liberty Power had been initiated but not completed; One Thousand Dollars ($1,000) for the non-quantifiable and unknown number of customers who may have been potentially affected by the unauthorized switching conducted by Liberty Power’s agent; and Twenty Thousand Dollars ($20,000) for Liberty Power’s inclusion of an 'Energy Only Rate' on Liberty Power’s disclosure statements and marketing materials
Additionally, Liberty Power will provide to each of the customers, who had one or more of the fifty-six (56) accounts physically switched to Liberty Power, a refund for the entire electric generation supply portion on the customers’ bills for the first two (2) billing periods that the customers were switched to Liberty Power, pursuant to 52 Pa. Code § 57.177(b).
In a 2019 statement in support of the settlement agreement included with the agreement, Liberty Power stated, "Although allegations of unauthorized switching and unlawful sales and marketing are of a serious nature, the facts present here do not evidence either willful fraud or misrepresentation on the part of Liberty Power. Rather, Liberty Power’s internal processes quickly revealed a problem with an independent agent leading Liberty Power to swiftly engage in an investigation of the agent, termination of the contract with the agent, remedial action with the impacted customers and a voluntary decision to self-report the incident to OCMO staff."
In a 2019 statement in support of the settlement agreement included with the agreement, Liberty Power further stated, "Regarding the allegation of unlawful sales and marketing actions, no customers raised any complaints with Staff regarding a misunderstanding of Liberty Power’s charges. Despite this, Liberty Power changed its enrollment and disclosure documents effective February 10,2017 -- twenty days after being first informed about I&E’s concerns. Since that time, Liberty Power’s documents set forth only one price which includes all relevant components of the commodity price charged to include GRT. Liberty Power also revised its documents to consistently refer to a 'fixed rate' and is agreeing to pay $20,000 to address the concerns raised by I&E related to this allegation."