Energy Plus Settles Consumer Electric Complaints In Connecticut

May 22, 2014
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The state Public Utilities Regulatory Authority (PURA) will receive $4.5 million for consumer assistance and education and enforcement activity related to third-party electric suppliers under a settlement agreement with electric supplier Energy Plus Holdings, LLC, Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz said today.

The settlement was filed today and, if approved by PURA, resolves a docket the Attorney General and Consumer Counsel requested in 2012 to investigate the company’s marketing tactics in soliciting customers after numerous consumer complaints.

“With this settlement, we are agreeing to disagree with the company regarding any finding of fault in its past behavior,” said Attorney General Jepsen. “Going forward, Energy Plus will be subject to the new laws governing all electric suppliers that do business in the state of Connecticut that the legislature passed this year as well as the new regulations that PURA will develop.

“The company has been acquired by a new owner who has undertaken efforts to improve marketing practices. It is appropriate to settle at this time not only because past circumstances have changed, but also because the agreement advances a vital consumer protection mission into the future: helping to enhance the ability of PURA to address abuses in the electric supplier market.

“The timing of this agreement is opportune for both consumers and PURA, which has seen diminished enforcement resources in recent years and is now tasked with implementing and enforcing substantial statutory reforms in the electric supplier market.”

“I’m pleased that we have addressed concerns raised about pricing and advertising claims by Energy Plus in a way that will be a positive for all electric ratepayers. This money will fund new positions at PURA to increase enforcement, ramp up customer education, and support other important initiatives with respect to the electric supplier market,” said Consumer Counsel Katz. “It’s been a rough year for many customers of electric suppliers, and I’m glad we can bring them some good news. Between these new resources and the new law enacted by the legislature earlier this month, we’re looking at a changed landscape for this market. Change is certainly needed in this area.”

In their 2012 joint petition, the Attorney General and Consumer Counsel cited examples of solicitations made by Energy Plus that they alleged could lead reasonable consumers to conclude that they would receive benefits in addition to competitive electricity prices. However, some consumers complained that they paid rates much higher than, and sometimes double, the standard service rate, and reported difficulty obtaining information about variable rates from the company.

Under legislation included in the budget implementation bill passed earlier this month by the General Assembly, funds from the settlement– if approved by PURA before June 30, 2014 – will be deposited into a separate, non-lapsing account to fund electric supplier enforcement and education activity by PURA. PURA may also use settlement funds in the development of new regulations related to electric supplier sales, marketing and billing practices. The Attorney General, Consumer Counsel and Energy Plus filed a joint motion seeking approval of the settlement by PURA, which was not involved in negotiating the agreement.

Separate legislation passed by the General Assembly this year made substantive reforms to the electric supplier market, including new notification requirements, elimination of termination fees for month-to-month variable-rate service and 72-hour standard-service switching at customer request. The legislation directs PURA to develop new regulations on marketing and sales practices, standard contract requirements and standard billing formats.

“I worked hard to advocate for legislation creating meaningful consumer protections in the electric supplier market,” Attorney General Jepsen said. “I applaud the legislature for enacting measures that, while not delivering everything consumer advocates sought, promise much greater transparency and flexibility for customers of independent electric suppliers. Those reforms will only be effective if PURA can enforce them, and this settlement provides much needed enforcement resources in the near term. I urge policymakers to continue to ensure that PURA has adequate funding and staffing to protect consumers after these settlement funds are exhausted. “

Assistant Attorneys General John Wright, Michael Wertheimer, Brendan Flynn and Phillip Rosario, head of the Consumer Protection Department, assisted the Attorney General with this matter. Attorney Joseph Rosenthal and Utilities Examiner Dave Thompson assisted the Consumer Counsel.

Please click here to view the settlement document and click here to view the motion to withdraw and close proceedings.

 

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One Response to Energy Plus Settles Consumer Electric Complaints In Connecticut

  1. tom mccormick on May 29, 2014 at 6:23 pm

    The Ag’s and Consumer Council’s proposed settlement dealing with alleged unfair trade practices by Energy Plus Holding, LLC in its electric supply rates is deficient. It fails to make whole those impacted by violations of the Fair Trade Practice Act and other State regulations as alleged in the parties filing at PURA – docket 12-07-13.
    Any settlement to be fair must return excess rates collected by EPH to individuals impacted. There is no finding that EPH was in violation of State statutes. This settlement is essential a plea bargain that lets the AG’s office off the hook of doing its job—enforcing the law.
    It would be a blatant conflict of interest for the Commission to accept the proposed 4.5 million dollar settlement. It would be a bureaucracy feeding itself. Since there is no estimate in the docket of the amount collected by EPH in possible violation of the law, the 4 .5 number is pulled out of the hat. What If EPH collect more than 4.5 in excessive rates?
    Unfortunately, the petition has become politicized by the Legislature via putting the proposed amount into the budget. Since the Commission has bowed to political pressure in the past, its independence cannot be in assured. (I know from personal experience and statements from the Commission’s professional staff of interference both from the Governor’s Office and Legislature). The Commissioners are fully aware that opposing the Legislature is impolitic to both the department’s budget and their own salaries.
    The AG’s and Consumer Council’s public statement that since there has been recent change of ownership, license revocation as called for in the original petition would be unfair. Nonsense. When one party buys another, it assumes both assets and liabilities –due diligence. Change in corporate ownership is a common way to avoid responsibility.
    Please consider these remarks in any future coverage.





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