Connecticut Public Utilities Regulatory Authority Seeks to Fine and Suspend License of Retail Energy Supplier for Violation of Door-to-Door Marketing Prohibition during Pandemic
March 22, 2021
Earlier this month, the Connecticut Public Utilities Regulatory Authority (“Authority”) issued a Notice of Violation and Assessment of Civil Penalty (“NOV”) against Residents Energy, LLC (“Residents”). In its NOV, the Authority seeks to impose a civil penalty of $1,500,000 upon Residents and suspend Residents’ electric supplier license for eighteen months. During this suspension period, Residents’ current customers must be returned to standard service.
Among other things, the NOV alleges that a vendor of Residents violated PURA’s order prohibiting door-to-door marketing during the COVID-19 pandemic. The NOV further alleges that Residents violated statutory provisions, the PURA Order granting its electric supplier license, and requirements of the Marketing Standards by not properly monitoring and managing the marketing activities of its vendors, failing to record all door-to-door marketing, marketing in a location with clearly-posted signs prohibiting trespassing, and failing to file its reports on a quarterly basis.
The NOV further provides that the lack of recordings is particularly concerning given the content of some of the complaints. The NOV explains that multiple complaints indicate that Resident vendor agents stated they were from the electric distribution company, told complainants that signing up with Residents would lower their bill but it did not, and failed to leave the complainants any information about their enrollment.
The NOV alleges: “If a vendor is so unscrupulous that it is willing to conduct door-to-door marketing when it is prohibited during a pandemic, then it is reasonable to assume many, if not all, of the allegations in the complaints are true.” Further, the NOV provides that “[t]he gravity of these violations is severe” and “exhibits gross disregard for public wellbeing in favor of Residents’ desire to enroll customers – even worse, to enroll customer at prices greater than standard service at a time when so many customers are struggling financially due to the pandemic.”
While the NOV notes that Residents has cancelled the enrollments and rerated impacted customers, the NOV provides that there is no evidence in the docket to demonstrate that Residents has a plan in place to prevent this situation from occurring again in the future. The NOV states: “Promising to perform better in the future rings hollow when compared with past performance.” The NOV provides that an exit from the Connecticut market for an extended period will give Residents time to ensure that its monitoring plans are complete and implement those plans in other jurisdictions to ensure those plans work in practice. When the suspension has ended, Residents may petition the Authority to reinstate its license.
The NOV does not represent final agency action, and Residents has a right to a hearing to contest the NOV.
This Eckert Seamans Energy Supplier Litigation Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice. If you have any questions regarding the above, please contact Kristine Marsilio at kmarsilio@eckertseamans.com or 717.237.6037, or any other attorney at Eckert Seamans with whom you have been working.