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N.Y. PSC Issues Show Cause Order To ESCO, Competitor Alleged ESCO Misrepresented To Customers ESCO Was Acquiring Customers From Distressed Competitor

October 16, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The New York PSC issued a show cause order to Astral Energy, LLC stating that the PSC has, "received numerous complaints, many alleging slamming, against Astral Energy, LLC."

The PSC said that its investigation and a Notice of Apparent Failure (NOAF), "identified the following areas of non-compliance with UBP requirements and the Commission’s regulations: sales agreements used to enroll customers; third-party verifications of telephone sales; unauthorized enrollments, i.e., 'slamming'; false and misleading marketing; and failure to comply with 16 NYCRR Part 12 which, sets forth the Commission’s consumer complaint process."

The PSC directed Astral to show cause within seven days why Astral should not be precluded from enrolling new customers until the Commission orders otherwise, and show cause within 30 days why the Commission should not revoke its eligibility to operate in New York

In addition to complaints from customers, the PSC said that, "the Department received a competitive complaint from another ESCO, BluCo Energy, LLC (BluCo)."

"BluCo alleged that, in an effort to sign up BluCo’s customers, Astral has called existing BluCo customers and stated to them that BluCo was going through financial difficulty and that BluCo had negotiated with Astral for Astral to offer BluCo customers a more competitive rate," the PSC said

More specifically, the PSC's order alleges as follows:

"In May 2015 Department Staff received a competitive complaint from BluCo Energy alleging its customers were being deceptively marketed to by representatives of Astral. BluCo became aware of this when BluCo began receiving inquiries from its customers asking if Astral Energy purchased BluCo and if their BluCo contracts were being taken over by Astral. BluCo alleged that its customers were being called by a woman who said she represented BluCo. This caller then told the BluCo customers that BluCo was going through financial difficulty and that BluCo negotiated with Astral to offer BluCo customers a more competitive rate. As a result of this information, on July 31, 2015 Department Staff called the number from which these calls were reported to have originated. Department Staff confirmed that at least one Astral marketer identified herself as being with BluCo and informed customers that BluCo was in 'foreclosure' with a bank, and that BluCo had negotiated with Astral to offer them a 'more competitive' price and to switch to Astral."

The PSC said that, in response to the NOAF, Astral stated that, "[t]he agent involved with the alleged BluCo customers was terminated by Astral on or about August 18, 2015 after reviewing the matters in the NOAF."

However, the PSC said that, "On August 31, 2015, after another complaint from BluCo, Department Staff again called the number from which BluCo customers were being solicited by Astral. Contrary to the assertions of Astral, that it had terminated the agent involved in this false and misleading marketing, Department Staff recorded a solicitation call by the same Astral marketer as in the July 31st recording. This recording captures a sales pitch substantively identical to that captured in the July 31st recording."

Apart from alleged deficiencies in Astral's sales agreements versus what is required by the PSC, the PSC said that, "it appears that the Agreements Astral is using in practice and the sample sales agreements Astral has submitted to the Department are significantly different."

In particular, the PSC alleged that, contrary to the PSC's requirements, Astral's agreement provided to customers refers customer's to Astral's website for additional terms and conditions. Such additional terms and conditions, the PSC alleged, have been cited by Astral in response to complaints about customers not being charged the fixed price in their contract

The PSC said that, in response to a customer complaint, "Astral acknowledged that there is a 'price difference with said customer vs the contracted rate.' Astral maintained that this was acceptable because the 'Terms and Conditions' allowed for 'pass through and swing charges.' The signed Agreement provided by the customer in that case does not contain the terms and conditions referred to by Astral in its response. The terms and conditions only appear to be accessible on Astral’s website. Astral has not provided documentation to show that the terms and conditions were actually provided to the customer before the customer was asked to sign the Agreement."

The PSC also said that a review of 12 TPVs, "demonstrates that none of them comply with the UBP Section 5, Attachment 1 that was in effect from June 2012 until May 2015."

"Specifically, the TPVs did not include: a description of the types of information that Astral would obtain from the utility, the purpose of its use, and confirmation of the customer’s authorization for the release of such information; or a statement that the customer would receive a written copy of the sales agreement, and that, as a residential customer, the customer may rescind the agreement within three business days after receipt of the sales agreement," the PSC said

While Astral has said that it would refund several customers as a result of the NOAF, the PSC said that several customers have not received refunds from Astral.

Case 15-E-0556

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