Press Release

PUC Orders $6.75 Million in Refunds & Penalties Against IDT Energy; Accused of Deceptive “Polar Vortex” Marketing and Billing Practices

Published on 6/30/2016

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today tentatively approved a settlement under which IDT Energy, Inc. (IDT), an electric generation supplier, has agreed to pay more than $6.75 million in consumer refunds and penalties. Also, IDT will modify its marketing and business practices, as a result of alleged deceptive actions that triggered thousands of consumer complaints during the “Polar Vortex” winter of 2013-14.

The Commission voted 5-0 today to approve a settlement resolving a formal complaint against IDT which was filed by the Pennsylvania Office of Consumer Advocate (OCA) and the Office of the Attorney General (OAG) on June 20, 2014. The complaint alleged that IDT misled customers with deceptive promises of savings; engaged in “slamming,” or the unauthorized enrollment of a customer; mishandled customer complaints; failed to provide accurate pricing information; charged different prices than listed in customer disclosure statements; and failed to comply with Pennsylvania’s Telemarketer Registration Act.

Under the terms of the settlement approved today, IDT is required to take the following actions:

• Pay a total of $6,577,000 in refunds, which will be paid to IDT customers on variable rate plans and billed for usage in January, February or March 2014 - including $4.1 million that IDT previously issued voluntarily to consumers.
• Contribute $75,000 to “Hardship Funds” operated by electric distribution companies.
• Pay a $25,000 civil penalty to the Pennsylvania General Fund, and be prohibited from claiming a tax deduction for that amount.
• Pay the first $75,000 in costs for a third-party administrator to oversee the distribution of consumer refunds.
• Make numerous modifications to its business practices related to product offerings and advertising, disclosure statements, third-party verifications, training, compliance monitoring, reporting and customer service. 
• Refrain from offering variable rate electricity products for a period of 21 months. 

The Commission’s Order notes that the OCA and the OAG will determine refund amounts for consumers impacted by this case, based on their individual usage, the price charged and refund amounts that may already have been received directly from IDT. Under the terms of the settlement, the OCA and the OAG will retain a third-party administrator to handle distribution of the consumer refunds.  

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” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

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Docket No.: C-2014-2427657
 

Contact:

• Nils Hagen-Frederiksen
  Press Secretary
  717-418-2701
  nhagen-fre@pa.gov