UPDATE: Retail Energy Supplier Agrees to Three Year License Revocation Period and Lesser Financial Payment Pursuant to Settlement Agreement Regarding Violation of Pandemic Marketing Prohibitions
June 22, 2021
As detailed in an earlier post, Residents Energy, LLC (“Residents”) was the subject of a Notice of Violation and Assessment of Civil Penalty (“NOV”) issued on March 12, 2021 by the Connecticut Public Utilities Regulatory Authority (“Authority”) regarding allegations of continued door-to-door marketing despite a prohibition on such marketing during the COVID-19 Pandemic. According to the NOV, Residents was a new entrant into the Connecticut market and under specific reporting requirements due to slamming allegations in other states. Once Residents began to engage in marketing in Connecticut, according to the NOV, it failed to properly audit its third party vendor which engaged in prohibited door-to-door marketing. The Authority sought to impose a civil penalty of $1,500,000 upon Residents, to suspend Residents’ electric supplier license for eighteen months, and to subject Residents to one year of auditing if license reinstated.
On June 22, 2021, the Authority approved a Settlement Agreement and rescinded the NOV. Pursuant to the approved Settlement Agreement, Residents agreed to a voluntary payment in the amount of $300,000 and to voluntarily withdraw from the Connecticut electric supplier market for three years. Residents agreed to return all existing customers to standard service. While the Authority agreed not to impose future penalties for the violations subject of the Settlement Agreement, it specifically reserved the ability to rely on violations as evidence of past violations in any possible future action brought against Residents for assessing the penalty amount.
Although Residents was ultimately able to negotiate a lower financial payment, it did so at the cost of a longer stay out from the Connecticut market. When read in full, the allegations of the NOV claim that the retail energy supplier did not seriously monitor its third party agent, ignored signs that the agent was engaging in prohibited activities, and did not timely provide required reporting to the Authority. This, in addition to the Authority’s initial concerns at the time of licensing regarding allegations from other states, appears to have supported the Authority’s decision to accept a longer license revocation period in lieu of a larger financial payment.
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 Deanne M. O’Dell at firstname.lastname@example.org or 717.255.3744, or any other attorney at Eckert Seamans with whom you have been working.