Press Release

PUC Weighs Two Settlements with Electric Suppliers Over Questionable Marketing Practices

Published on 8/29/2013

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today issued for comment proposed settlements with two electric generation suppliers (EGSs) over informal investigations into alleged suspect marketing practices.

The Commission voted 5-0 to issue the proposed settlements between the electric generation suppliers (EGSs) and the PUC’s independent Bureau of Investigation & Enforcement (I&E) for comment. Interested parties have 20 days to comment on the proposed settlements. Instructions on how to file comments are contained in the Commission’s Order.

MXenergy Electric Inc.

The proposed settlement with MXenergy follows an informal investigation focused on the company’s marketing of its residential EGS services and specifically its door-to-door sales practices.  The referral was based on information from a federal lawsuit filed by Gateway Energy Services Corp. that alleged certain third party independent contractors representing MXenergy engaged in “slamming,” which is an unauthorized change of a customer’s EGS, with the intent to confuse and deceive.  In this instance, four of Gateway’s existing customers had their existing contracts with Gateway terminated and were entered into new contracts with MXenergy.  As part of its investigation, I&E determined that MXenergy violated PUC regulations by initiating the process of switching the EGS for 22 customer accounts without proper authorization.

In March 2012, the PUC rejected a settlement between I&E and MXenergy saying that it did not believe the terms of the settlement including an $11,000 fine was enough to “remedy this situation or to deter potential future violations of the Public Utility Code or the Commission’s regulations by an electric generation supplier.”

The proposed settlement includes the following actions by the company:

• Paying a civil penalty of $22,000, which it agrees not to recover any portion from Pennsylvania consumers;
• Conducting background checks on all potential independent contractors and agents;
• Complying with the PUC’s supplier marketing guidelines;
• Providing the PUC with written notification of marketing activities as well as a list of independent marketers; and
• Increasing its reporting to the PUC on consumer complaints.

Public Power LLC

The proposed settlement with Public Power follows an informal investigation into the company’s alleged slamming of customer enrollments within the PECO Energy Co. service territory. The PUC’s I&E determined that Public Power violated PUC regulations and the Public Utility Code by initiating the process of switching the EGS on 2,937 customer accounts.  In the settlement, the company admits no wrongdoing.

The proposed settlement includes the following actions by the company:

• Paying a civil penalty of $64,450, which it agrees not to recover any portion from Pennsylvania consumers;
• Providing a refund to each of the 263 customers physically switched to Public Power for the electric generation portion of their bill for the time they were served by Public Power, and notifying the PUC when these refunds have been made;
• Providing written notice to the PUC of any changes to its marketing practices; and
• Implementing revisions to its operating procedures.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility. “Like” PAPowerSwitch on Facebook for easy access to information on electric shopping.

# # #

Docket Nos. M-2012-2201861; M-2012-2257858

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov