People's Counsel Files Complaint Against Retail Supplier, Affiliated Utility Over "Consolidated" Bill & Bill Messages -- EnergyChoiceMatters.com

People's Counsel Files Complaint Against Retail Supplier, Affiliated Utility Over "Consolidated" Bill & Bill Messages

November 24, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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The Maryland Office of People’s Counsel filed a complaint against Washington Gas Light Co. ("Washington Gas" or "WGL") and WGL Energy Services, Inc. ("WGL Energy") concerning what, as alleged by OPC, the utility termed a "subscriber-consolidated bill" issued by WGL Energy and messages on the bill

OPC alleged, "In October and November 2021, Washington Gas sent customers enrolled with its affiliated gas supplier, WGL Energy, bills that include a marketing statement -- unattributed to either the gas distribution company or supplier -- describing natural gas as 'a clean energy' that is less emissions intensive and more environmentally beneficial than an all-electric home. Despite the well-known fact that natural gas production, distribution, and consumption are major sources of greenhouse gas emissions, the marketing statements contain no substantiating or contextual information to qualify the environmental claims. The billing statements deceive and mislead utility customers about the emissions attributes of natural gas."

OPC alleged, "Washington Gas reports that the billing statements are unique to customers receiving gas supply from WGL Energy -- a core service provider and affiliate of Washington Gas. The inclusion of a marketing statement intended only for customers of Washington Gas’s affiliate supplier raises significant issues about Washington Gas’s billing policies, including whether it engages in joint marketing with its affiliates and whether it treats its affiliates preferentially, in violation of the utility code of conduct."

WGL provided the following statement concerning the matter:

"WGL received the filing from the Office of the People’s Council in Maryland after the close of business on Tuesday and has started our review of the complaint.
"While we prepare our response, we can share that WGL is committed to ethical and honest customer communications and adamantly denies the suggestion of joint marketing services with any of our suppliers.
"As a provider of natural gas for more than 170 years, WGL believes natural gas is an affordable, reliable, cleaner energy source for customers and communities across the region."
--- Statement from WGL

OPC alleged that at least one customer received the bills at issue in the complaint

OPC alleged, "The bills use Washington Gas’s billing format and include charges for distribution services from Washington Gas and gas supplied by WGL Energy."

OPC alleged, "The WGL bills include the following marketing claims: 'Natural gas is a clean, efficient, and reliable energy [sic]. Converting an all electric home to natural gas is the equivalent of planting 2.75 acres of trees or driving 26,520 fewer miles each year. In addition, natural gas cost [sic] 1/3 less than electric [sic], which makes it a smart decision for the environment and your wallet.'"

OPC alleged, "The marketing claim is not attributed to Washington Gas or WGL Energy, and a customer could reasonably conclude that the claim originates from Washington Gas."

OPC alleged, "OPC inquired with Washington Gas about the marketing statement on the bills. The company described the bill as a 'subscriber-consolidated bill' issued by WGL Energy and stated that while it occasionally reviews and includes statements from suppliers on utility-issued consolidated bills, it exercises no control over statements included by suppliers on 'subscriber-consolidated bills."

In Maryland, WGL offers a supplier consolidated billing option. OPC alleged that, in 2001, Washington Gas represented that it has enabled suppliers to render their own consolidated bills, provided they replicate WGL’s "bill format."

WGL Energy has also historically offered a "blanket bill", which WGL Energy previously described in 2018 as a, "legal agency billing arrangement," under which the customer contractually authorizes WGL Energy to receive and pay the customer's utility bill for distribution services (as well as WGL Energy gas supply) for a flat monthly fee for a fixed term.

OPC alleged that, "[a]s of the date of filing, it is still unclear which entity is ultimately responsible for issuing the WGL bills. OPC has attached in Appendix B to this complaint two data requests asking Washington Gas and WGL Energy to clarify its billing practices."

However, OPC alleged that, "The WGL bills are -- at least functionally -- Washington Gas-issued consolidated bills."

OPC alleged that: a. The WGL bills were printed using Washington Gas’s billing format; b. The bills’ return address is Washington Gas’s customer service center; c. The bills refer customers to Washington Gas’s website and customer service phone number for any customer service or billing questions; d. The bills do not contain any clear disclaimers distinguishing WGL Energy from Washington Gas; e. The marketing statement on the WGL bills is not attributed to either the gas supplier or distributor and is placed in a location in which a customer will reasonably conclude that it comes from Washington Gas.

The bills included in OPC's complaint prominently feature the Washington Gas utility name and logo at the top left corner on the first page

OPC alleged, "OPC has been unable to identify any other Washington Gas consolidated bills issued to customers of non-affiliate core service providers that contain a similar marketing statement."

OPC alleged, "Compared to non-affiliate suppliers, it appears that WGL Energy uniquely benefits from having such opportunity to include marketing statements on bills issued by Washington Gas."

OPC alleged, "Washington Gas’s actions, as described above, violate COMAR 20.40.02.01(B)(5) by engaging in marketing or advertising with a core service affiliate."

OPC alleged, "Washington Gas’s actions, as described above, appear to violate COMAR 20.40.02.02(B)(1) by failing to afford non-affiliate suppliers a similar opportunity to include marketing statements on Washington Gas-issued consolidated bills."

OPC alleged, "Washington Gas’s actions, as described above, appear to violate COMAR 20.40.02.01(B)(2) by giving preferential treatment to a core-service affiliate."

OPC alleged that, "Washington Gas is responsible for," what OPC termed "misleading" statements described further below. "A utility bears responsibility for a marketing claim on a utility-issued bill where it is readily apparent that the claim is false, deceptive, or misleading and a customer can reasonably attribute that statement as originating from the utility," OPC alleged

OPC alleged that the statement, "Natural gas is a clean . . . energy", "falsely implies that natural gas use results in no significant greenhouse gas emissions and also misleads consumers about other emissions attributes of natural gas."

OPC alleged that the statement, "Converting an all electric home to natural gas is equivalent to planting 2.75 acres of trees or driving 26,520 fewer miles each year," is, "deceptive and misleading because it lacks context regarding the term 'all electric,' overstates the environmental attributes of natural gas consumption, and may confuse consumers as to the actual environmental benefits of converting to natural gas."

OPC alleged that the "unqualified" statement, "Natural gas costs 1/3 less than electric, which makes it a smart decision for the environment and your wallet," is, "deceptive because it may confuse customers into thinking that natural gas -- another form of fossil fuel often derived during the extraction of dirtier fuels -- is generally environmentally friendly and 'green.'" OPC alleged that this statement, "is further deceptive and misleading because it compares the price of natural gas to electric with no qualifications as to when—and if—the statement is actually true."

OPC alleged that Washington Gas’s actions, as alleged above:

a. consist of 'unfair, abusive, or deceptive trade practices' as defined under Commercial Law Article § 13-301; and
b. violate PUA § 2-113, because deceptive marketing claims are contrary to the public interest and the adequate, economical and efficient delivery of utility services in the State; and PUA § 5-303, because they do not meet the standard of safe, adequate, just, reasonable, economical and efficient service and fail to account for the quality of the environment through misleading and deceiving customers about the true environmental cost of increased natural gas consumption.

To the extent that WGL Energy is responsible for the misleading statements, OPC alleged that WGL Energy Service’s actions, as alleged above:

a. consist of 'unfair, abusive, or deceptive trade practices' as defined under Commercial Law Article § 13-301; and
b. violate PUA § 7-604(a) and COMAR 20.59.07.07 by providing misleading information and engaging in deceptive marketing practices.

Among other relief, OPC requested that the Commission issue an order:

• directing Washington Gas and WGL Energy to immediately remove the deceptive marketing claim from all billing statements
• levying civil penalties against Washington Gas of at least $500,000 and against WGL Energy of at least $500,000
• opening an investigation into the billing practices of Washington Gas and WGL Energy to determine the scope of state law violations.

Case No. 9673

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