Why Electricity Suppliers in Pennsylvania Already Facing Regulatory Action Initiated By Consumer Advocates and the PA AG Face New Complaints From PaPUC Enforcement Bureau
September 2, 2014
Two out of the five competitive energy suppliers who are already in the process of addressing complaints filed jointly by the Pennsylvania Attorney General (“AG”) and the Pennsylvania Office of Consumer Advocate (“OCA”) before the Pennsylvania Public Utility Commission (“PaPUC”) have been hit with complaints by the PaPUC’s Bureau of Investigation and Enforcement (“I&E”). This raises the question – why?
The AG complaints filed in June against Hiko Energy and Respond Power LLC allege various misleading marketing practices and that the companies provided inaccurate pricing information to consumers. The AG’s actions request that the Commission fine the companies, order refunds and/or suspend or revoke their licenses. While I&E intervened in the AG actions, it has now filed its own complaints against Respond Power and Hiko Energy seeking substantial civil penalties and revocations of each supplier’s PaPUC license.
I&E maintains that the separate actions are necessary and must proceed independent of the OCA/AG proceedings because I&E’s actions rely on its own separate and independent investigations of the two companies. These I&E investigations are based on I&E’s review of informal consumer complaints made directly to the PaPUC in contrast to the OCA/AG’s reliance on consumer complaints received by the AG and written information collected from consumers by the OCA, coupled with the formal complaints received at the PaPUC.
For Respond Power, I&E bases its action on a total of 1,050 of these informal PaPUC complaints and seeks a total civil penalty of $639,000 and rescission of the company’s authority to do business in Pennsylvania. For Hiko Energy, I&E bases its action on informal PaPUC complaints and seeks a total civil penalty of $14,780,000, along with a refund to each customer, consisting of the difference between the amount billed and the minimum guaranteed discounted rate the customer was entitled to receive. Similar to its complaint against Respond Power, I&E seeks revocation of Hiko’s supplier license.
While a decision on preliminary objections regarding whether the I&E proceedings and the OCA/AG proceedings should be consolidated is pending, the important message here is that the informal consumer complaints brought to the PaPUC against suppliers are being carefully reviewed by I&E and, depending on their nature, could result in formal action against a supplier initiated by I&E. This can happen regardless of whether the informal complaints are settled amicably with the consumers and notwithstanding any other action pending by OCA or AG. Therefore, any consumer complaints against a supplier in Pennsylvania – whether lodged informally or formally – at the PaPUC, OCA or AG should be carefully handled and addressed by the supplier in an effort to avoid subsequent proceedings threatening significant fines and the revocation of the supplier’s license.
If you have any questions about the content of this post, please contact Dan Clearfield at (717) 237-7173; dclearfield@eckertseamans.com, Deanne O’Dell at (717) 237-3744; dodell@eckertseamans.com, or Sarah Stoner at (717) 237-6026; sstoner@eckertseamans.com. This Eckert Seamans Energy and Utilities Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice.