Connecticut Regulator Announces Severe Potential Penalties for Energy Supplier
May 10, 2021
On May 4, 2021, the Connecticut Public Utilities Regulatory Authority (“PURA”) issued a Notice of Violation and Assessment of Civil Penalty (“NOV”) to Mega Energy of New England, LLC (“Mega Energy”). In the NOV, PURA asserted that Mega Energy repeatedly engaged in unfair or deceptive marketing practices and that PURA has reason to believe Mega Energy has violated several Connecticut statutes. Among other potential violations, PURA has made the following specific allegations:
- Mega Energy consistently failed to state the standard service rate at any time during its solicitations as required by Connecticut law;
- Mega Energy implied that its offered fixed rates were low when they were in fact higher than the standard service rate;
- There was evidence that Mega Energy’s agents remained on the call with the consumer during the Third-Party Verification (“TPV”) process;
- Mega Energy’s sales agents instructed consumers not to ask questions during the TPV process and berated consumers if they did ask questions during the TPV;
- Mega Energy’s sales agents gave consumers specific instructions as to how to answer questions during the TPV;
- Mega Energy’s sales agents implied that consumers must choose an energy supplier;
- Mega Energy’s sales agents implied that Mega Energy was affiliated with the local electric distribution company (“EDC”) or other suppliers; and
- Mega Energy’s sales agents consistently failed to explain Connecticut’s required three-day rescission period to consumers.
In light of these allegations, PURA’s NOV proposes the following:
- A fine in the amount of seven hundred fifty thousand dollars ($750,000.00);
- A suspension of Mega Energy’s electric supplier license for a period of five (5) years;
- A return of all customers to standard service along with notice to those customers indicating they are being returned to standard service because of the suspension of Mega Energy’s Connecticut energy supplier license; and
- If Mega Energy’s license is reinstated after its suspension, Mega Energy will be subject to auditing of all its marketing for two (2) years from the date it resumes marketing.
Fortunately for Mega Energy, the NOV does not represent final agency action, and Mega may request a hearing to contest its findings. For its part, Mega Energy has indicated that it is reviewing the NOV and will submit a response in accordance with PURA procedures.
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 Robert Gastner at 202-569-6674 (rgastner@eckertseamans.com), or any other attorney at Eckert Seamans with whom you have been working.