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PURA Opens Investigation of Public Power, LLC
October 4, 2011
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The Connecticut PURA has opened an investigation of Public Power, LLC under Docket 11-10-06.
"While investigating complaints from Public Power customers, it appears that Public Power may have charged rates other than those to which it had contracted with customers; it has been unable to verify rates it charged customers via its EDI subcontractor; and it has failed to submit timely responses to inquiries alleging unauthorized switching," Staff said in a memo to open the docket.
"Some of these events may have transpired while the company was under different ownership," Staff noted, "but taken together warrant escalated regulatory review."
The purpose of the proceeding is to review Public Power's compliance with the terms of its supplier license.
PURA through an informal process has sought information regarding, when the company was still organized as Public Power & Utility, Inc., a contract change which ceased providing guaranteed savings to customers.
In one specific instance, PURA said that a customer contract provided that the customer rate would fluctuate each month but, "will maintain a not to exceed price of at least 5% below current CL&P or UI standard generation service rates."
Under prior ownership, in March 2009, Public Power & Utility removed the 5% savings guarantee from its standard enrollment form. However, PURA alleged that Public Power & Utility also ceased pricing rates for prior contracts at least 5% below the utility rate.
"Based on Public Power's July 1, 2011 e-mail, and July 20, 2011 Letter, it now appears that the Company converted the pricing clause of its pre-April 2009 contracts (guaranteeing at least 5% savings in comparison to the CL&P/UI standard offer) to the 'potential savings will fluctuate month to month' clause without notice to pre-April 2009 customers. That is, not only did Public Power modify contracts for new enrollments, it apparently re-rated all then-existing contracts as well," PURA said.
In a response, Public Power said that it was unable to locate records which indicate what action, if any, prior ownership took to notify customers of the change.
Although current ownership and management was not present at the time, Public Power did note that the at-issue enrollment form stated (under Paragraph 6) that Public Power & Utility could "at any time" take action to, "modify, reassign or withdraw this agreement," based on adverse changes in market conditions. Public Power noted that the enrollment form also did not provide that notice was required to be provided to customers of any modification.
"The foundation of any competitive market is the ability of two parties to freely enter into a contract. Public Power is unaware of any statute, regulation or decision of the PURA which restricts the right of the parties to freely negotiate a provision like that in Paragraph 6."
Notwithstanding the above, Public Power has provided the specific customer whose complaint initiated the PURA investigation a refund, as well as to two other similarly situated customers, and has agreed to provide refunds to any affected customer who ask for one.
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