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Updated: Details On PUC Staff Notices of Probable Non-Compliance That Led To Settlements With Two Retail Suppliers

March 11, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Update, 3/11: Further details concerning the Notices of Probable Non-Compliance issued by Staff of the Public Utilities Commission of Ohio, which led to the stipulations originally reported on March 8 as noted below, have become available.

Ambit Northeast, LLC

PUCO Staff said in the Notice of Probable Non-Compliance that, "Over the past several months, Staff has received consumer complaints disputing their enrollment with Ambit. After investigating these complaints, Staff has determined that Ambit enrolled at least twelve customers without their authorization or consent."

In the Notice of Probable Non-Compliance, Staff said that:

"Specifically, Staff found that Ambit representatives:

• Enrolled customers online for a rate plan with Ambit without the customers’ knowledge or consent;

• Someone other than the customer or an authorized person completed Ambit’s third party verification."

Staff finds that Ambit is in probable non-compliance with the following sections of the OAC:

1. Ohio Adm.Code 4901:1-21-03(A), which states that 'Competitive retail electric service (CRES) providers shall not engage in unfair, misleading, deceptive, or unconscionable acts or practices related to, without limitation, the following activities: (1) Marketing, solicitation, or sale of a CRES; (2) Administration of contracts for CRES; and (3) Provision of CRES, including interactions with consumers.'

2. Ohio Adm.Code 4901:1-21-05(C), which states, in part, that 'No CRES provider many engage in marketing, solicitation, or sales acts, or practices which are unfair, misleading, deceptive, or unconscionable in the marketing, solicitation, or sale of a CRES.'

3. Ohio Adm.Code 4901:1-21-06(C), which states, in part, that 'CRES providers are prohibited from enrolling potential customers without their consent and proof of that consent as delineated in paragraph (D) of this rule.'

4. Ohio Adm.Code 4901:1-29-03(A), which states that 'A retail natural gas supplier or governmental aggregator shall not engage in unfair, misleading, deceptive, or unconscionable acts or practices related to, without limitation, the following activities: (1) Marketing, solicitation, or sale of a competitive retail natural gas service; (2) Administration of contracts for such service; and (3) Provision of such service, including interactions with consumers.'

5. Ohio Adm.Code 4901:1-29-05(D), which states, in part, that 'No retail natural gas supplier or governmental aggregator may engage in marketing, solicitation, sales acts, or practices which are unfair, misleading, deceptive, or unconscionable in the marketing, solicitation, or sale of a competitive retail natural gas service.'

6. Ohio Adm.Code 4901:1-29-06(B), which states, in part, that 'A retail natural gas supplier and government aggregator is prohibited from enrolling potential customers without consent and proof of that consent as delineated in paragraph (C), (D), (E) of this rule.'

To address these issues of probable non-compliance, Staff proposes that Ambit take the following corrective actions:

1. Comply with Ohio Adm.Code 4901:1-21-08 and 4901:1-29-08 for the following complaints: 00182451, 00183417, 00199681, 00222719, and 00201822.

2. Audit all enrollments involving the agents associated with the above listed complaints and perform the following actions:

     (a) Provide Staff with a list of customers enrolled in supplier service by the agents identified during the investigations;

     (b) Contact each customer to ensure affirmative consent was obtain at the time of enrollment;

     (c) Comply with OAC 4901:1-21-08 and 4901:1-29-08 for each unauthorized enrollment; and,

     (d) Provide a report of the results of the completed audit to Staff no later than November 5, 2018."

Staff had originally proposed a forfeiture of $29,250. As previously reported, Ambit Northeast, LLC agreed to a forfeiture of $21,000 as part of the stipulation

Switch Energy, LLC

PUCO Staff said in the Notice of Probable Non-Compliance that, "Based on PUCO staff’s investigation of consumer complaints and previous notices to Switch Energy, staff finds Switch Energy in probable non-compliance with certain sections of the Ohio Adm.Code."

In the Notice of Probable Non-Compliance, Staff said that, "Based on staff’s review of Switch Energy’s response, staff has determined that Switch Energy sales agents were using misleading and deceptive practices to enroll customers. Misleading and deceptive practices included referring to the CRES service being offered as a discount that the customer was eligible for because the customer is enrolled with a certain electric distribution utility ('EDU'), misleading statements regarding the purpose of the sales call, and using the name of the customer’s current EDU and stating that the sales agents were calling about the customer’s electric bill."

In the Notice of Probable Non-Compliance, Staff listed the following:

"Probable Non-Compliance Violations

1. Ohio Adm.Code 4901:1-21-03(A) – CRES providers 'shall not engage in unfair, misleading, deceptive or unconscionable acts or practices related to * * * (1) Marketing, solicitation, or sale of a CRES. (2) Administration of contracts for CRES. (3) Provision of CRES, including interactions with consumers.'

2. Ohio Adm.Code 4901:1-21-05(C)(8)(a), which prohibits CRES providers from engaging in unfair, misleading, deceptive, or unconscionable marketing, solicitation, or sales practices, including claiming that a specific price or savings exists if it does not.

3. Ohio Adm.Code 4901:1-21-05(C)(8)(h), which prohibits CRES providers from making unfair, misleading, deceptive, or unconscionable marketing or advertising offers, including offers that lead customers to believe that the CRES provider is soliciting on behalf of or is an agent of an Ohio electric utility when no such relationship exists.

4. Ohio Adm.Code 4901:1-21-05(C)(10), which prohibits CRES providers from 'Engaging in any solicitation that will lead the customer to believe that the CRES provider is soliciting on behalf of or is an agent of any entity other than the CRES provider.'

Proposed Corrective Action

To address these issues of probable non-compliance, PUCO staff proposes the following corrective actions:

1. Process a refund to those consumers involved in the complaint cases identified in this investigation who were misled regarding the length of time they would receive the introductory rate. Use each customer’s price-to-compare when calculating any credit due the customer.

2. Provide PUCO staff with copies of all marketing materials, welcome letters, and standard communications sent to all newly enrolled customers.

3. Provide PUCO staff with all training materials and scripts used by agents marketing on behalf of Switch Energy.

4. Staff recommends that Switch Energy cease all telephonic marketing, soliciting, and enrollment activities in the State of Ohio until this matter is resolved. In accordance with Ohio Adm. Code 4901:1-21-15(A)(1), staff will view any continuation in Switch Energy’s telephonic marketing and enrollments to constitute additional offenses, which may result in additional enforcement actions, including rescission of Switch Energy’s CRES certificate and forfeiture to the state of up to ten thousand dollars ($10,000) per day, per offense."

Staff had originally proposed a forfeiture of $23,700 against Switch Energy. As previously reported, Switch Energy, LLC has agreed to a forfeiture of $15,400 as part of a stipulation

Earlier:

Two retail suppliers have agreed to forfeitures under separate stipulations with Staff of the Public Utilities Commission of Ohio

Ambit Northeast, LLC has agreed to a forfeiture of $21,000 as part of a stipulation with Staff of the Public Utilities Commission of Ohio to resolve a Notice of Probable Non-Compliance issued by Staff

Ambit has implemented all of the corrective actions proposed in the Staff’s Notice Letter. Specifically, Ambit Northeast performed the following:

a. Complied with Ohio Adm.Code 4901:1-21-08 and 4901:1-29-08 for the following complaints: 00182451, 00183417, 00199681, 00222719, and 00201822.

b. Audited all enrollments involving the agents associated with the above listed complaints and performed the following actions:

     i. Provided Staff with a list of customers enrolled in supplier service by the agents identified during the investigations;

     ii. Contacted each customer to ensure affirmative consent was obtain [sic] at the time of enrollment;

     iii. Complied with Ohio Adm.Code 4901:1-21-08 and 4901:1-29-08 for each unauthorized enrollment; and,

     iv. Provided a report of the results of the completed audit to Staff.

Further details concerning the matters raised in Staff’s Notice Letter were not immediately available

Separately, Switch Energy, LLC has agreed to a forfeiture of $15,400 as part of a stipulation with Staff of the Public Utilities Commission of Ohio to resolve a Notice of Probable Non-Compliance issued by Staff

Switch Energy has implemented all of the corrective actions proposed in the Staff’s Notice Letter.

Specifically, Switch has performed the following:

a. Processed a refund to consumers in accordance with the Staff’s Notice Letter.

b. Provided Staff with copies of all marketing materials, welcome letters, and standard communications sent to all newly enrolled customers and agreed with all of Staff’s recommended changes to this material.

c. Provided Staff with all training materials and scripts used by agents marketing on behalf of Switch Energy.

d. Addressed all issues concerning Staff’s Notice Letter needed to allow for the continuation of Switch Energy’s marketing, soliciting, and enrollment activities in the State of Ohio.

Further details concerning the matters raised in Staff’s Notice Letter were not immediately available

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