Retail Supplier To Sell Customer Book, Exit State Under Stipulation With PUC Staff

August 1, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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PALMco Power OH, LLC d/b/a Indra Energy (PALMco Power) and PALMco Energy Ohio, LLC d/b/a Indra Energy (PALMco Energy) (collectively PALMco) would sell its Ohio book of customers and cease operating in the state under a stipulation with Staff of the Public Utilities Commission of Ohio to resolve allegations contained in an investigation of PALMco

Among other things, PUCO Staff has alleged that PALMco was engaged in, "unfair, misleading, deceptive and unconscionable marketing, solicitation, and sales acts and practices when PALMco committed to provide customers with 'competitive' and 'the best' rates, when in reality, PALMco charged customers quadruple the price to compare."

Staff has alleged multiple instances in which PALMco was alleged to have charged customers about 5 cents per kWh initially, with a competitive, market, and/or best rate to be provided thereafter, but with such subsequent rate being about 20 cents per kWh. See our prior story for more details on the allegations

Under the stipulation, PALMco would not enroll any new residential or small commercial customers for the remaining term of its existing certificates (2/14/20 for gas; 3/8/20 for electric). Current customers may renew per terms of current Ohio contracts.

Under the stipulation, PALMco would not renew its Ohio certificates to provide CRES or CRNGS service.

Under the stipulation, prior to expiration of its current certificates, PALMco would exercise good faith efforts to assign all remaining customer contracts to an unaffiliated third-party supplier, in accordance with a bona fide transaction for value.

Under the stipulation, PALMco agrees that it will not transfer or sell any customer contracts to any of PALMco’s current owners, officers or partners. In addition, PALMco’s current owners agree not to operate as an owner, officer, director or partner for another CRES or CRNGS company in Ohio for five years from the signing of the stipulation.

Under the stipulation, PALMco would notify customers of the assignment. This notice will comply with all disclosures required under the Commission’s rules, and will also disclose that PALMco will be exiting the Ohio market at the end of its current certification term; that customers are under no obligation to remain with the new supplier; and that customers have the right to: (a) continue receiving service from the new supplier; or (b) terminate their contract at no cost and either return to the standard service offer or enroll with another supplier of their choosing.

The stipulation provides that the funds realized from any transaction associated with the assignment of customer contracts will be used by PALMco to satisfy the following obligations, in order of priority, as follows:

a. PALMco will re-rate all gas and electric customers who enrolled between 10/1/18 and 11/30/18 and who were not previously re-rated (as noted below). Re-rate means PALMco will calculate the difference between the rate it charged to the customer and the rate the customer would have paid to the applicable utility under the utility’s standard service offer or default rate, and refund or credit the difference to the customer. The Signatory Parties estimate that the total cost to re-rate all such customers will be approximately $800,000.

b. Refunds payable under the provision above will be paid within 30 calendar days of the date PALMco receives the funds from the transaction associated with the assignment. PALMco will provide the Signatory Parties a list of customers and amounts refunded within 10 calendar days thereafter.

c. If the funds realized from a transaction exceed the amount of the total refund obligation described in Paragraph (a) above, then 50% of the remaining funds shall be paid to the State of Ohio as a forfeiture. The forfeiture is subject to a cap of $750,000

The stipulation notes that signatory parties agree that PALMco voluntarily re-rated (versus default service) all customers who enrolled between 12/1/18 and 4/15/19 and were charged a variable rate, and that the total cost of re-rating these customers was approximately $385,000.

Signatory parties agree that PALMco has also reviewed and re-rated accounts in response to informal complaints brought to its attention by Staff. As of July 26, 2019, the amounts refunded to resolve such informal complaints is approximately $55,000. PALMco will continue to review such informal complaints and issue refunds where appropriate, regardless of when enrollment occurred.

The stipulation provides that, if PALMco is unable to effectuate an assignment of customer contracts as contemplated within 30 days prior to the expiration of its current certificates, then PALMco’s customers shall default to the applicable utility standard or default service offer, effective as of the date following the date of expiration of PALMco’s CRES or CRNGS certificate, as applicable.

Case No. 19-957-GE-COI

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