Updated With Statement From Counsel For RPA

PUCO Revokes Retail Supplier's Certificates, Orders $1.4 Million Forfeiture, Customers Returned To SOS

October 18, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Updated, 8:14 Pm ET, Oct. 18

Mark A. Whitt, counsel for RPA Energy, provided the following statement concerning the matter:

"Today’s Order is neither reasonable nor lawful, and we are confident the Supreme Court of Ohio will agree if the Commission denies rehearing and the Company is forced to appeal."

--- Statement from Mark A. Whitt, counsel for RPA Energy

Earlier:

The PUC of Ohio issued an order stating that, "The Commission finds that the record evidence shows RPA [RPA Energy, Inc.] has violated numerous rules and regulations and, therefore, should have its CRES [electric] and CRNGS [gas] certificates rescinded and be assessed a forfeiture of $1.44 million."

"Further, RPA is ordered to re-rate any customers enrolled during the period of January 2021 to July 2021," PUCO ordered, as further discussed below

RPA customers in Ohio will be returned to default service unless they choose an alternative supplier within 60 days; RPA shall provide a notice to customers explaining such.

In a news release, PUCO said, "A PUCO staff investigation revealed 159 violations, such as forged customer signatures, non-disclosure of monthly fees, misleading statements, unauthorized third-party verification, altered sales call recordings, and non-adherence to the PUCO’s pandemic restrictions on door-to-door marketing."

PUCO said in an order that, "RPA engaged in significant misconduct by spoofing telephone numbers in outbound telemarketing, modifying recordings of sales calls, falsifying TPVs which are intended to verify that the customer agreed to be enrolled, remaining on-site during at least one TPV, failing to maintain records required by Staff to complete its investigation, and failing to comply with a Commission health and safety order during the recent pandemic, among other violations discussed [in the order]..."

See background on the alleged violations leading to today's PUCO order here

PUCO said, "Staff proffered substantial evidence that RPA mislead and deceived consumers during its telephonic and in-person solicitations, including the testimony of three consumers who testified to deceptive or misleading acts when solicited by RPA. As is discussed in detail below, RPA solicited each of the consumer witnesses who testified on behalf of Staff during the hearing, and each involved a deceptive act, ranging from outright dishonesty with respect to who enrolled with RPA, in violation of Ohio Adm.Code 4901:1-21-05(C) and Ohio Adm.Code 4901:1-29-05(D), to fraudulent completion of a TPV, in violation of Ohio Adm.Code 4901:1-21-03(C) and 4901:1-29-03(D), which prohibit a CRES or CRNGS provider, respectively, from authorizing or changing a customer’s supplier of either retail electric or natural gas service without prior consent, as was the case with witnesses."

Among other things, PUCO said, "witness Edward Tokar provided videos, one of which showed a sales agent from RPA claiming that Mr. Tokar was required to select a supplier, which is untrue where the utility has its SSO in place. Further, Mr. Tokar testified that he did not feel the agent was being honest with him, stating that the agent pressured him to sign a document, and on cross-examination he further stated that he 'really did not trust [the sales agent]' once he was asked to sign a document without having agreed to switch suppliers for gas service."

PUCO said, "[Witness] Ms. Bossart testified as to her personal experience being solicited by RPA, as detailed above, wherein she was promised a gift card, only to be told that in reality she would receive unspecified 'rewards' in the amount of $50. Further, Ms. Bossart testified that she was on two occasions told by the agent of RPA that she was currently on a commercial rate for her residential service, and that in one such instance, the agent represented that Ms. Bossart’s utility had asked the agent to correct this error, which Ms. Bossart testified was inaccurate."

"During Ms. Bossart’s solicitation, RPA violated Ohio Adm.Code 4901:1-29-05(D), which prohibits a CRNGS provider from marketing offers that claim specific price savings exist when it does not; here, Ms. Bossart’s testimony reflects that she was told she would receive $50 in the form of a gift card, but was ultimately told she would receive $50 in value of 'rewards,'" PUCO said

PUCO said, "Staff witness Ramsey testified to other deceptive practices conducted by RPA in its marketing efforts, including spoofing its phone number to appear as either a local utility, or in witness Bossart’s case, the prefix of the local high school."

PUCO said, "RPA’s defense consisted less of a refutation of Staff’s evidence of misconduct than it does a deflection to its vendors or evidence of remedial action taken only after it had been informed of misconduct[.]"

"Based on the testimony of witnesses Barton-Johnson, Beauregard, Bossart, and Tokar -- all of which provide detailed accounts of RPA’s agents engaging in deceptive acts, ranging from spoofing phone numbers, promises of savings that did not exist, failing to properly identify themselves as an agent of RPA, to providing misleading information about a variable rate and changing a customer’s supplier without their consent while utilizing a falsified TPV -- shows that RPA, who is ultimately responsible for the conduct of its vendors where it holds CRES and CRNGS certificates, violated many Commission rules and regulations, including Ohio Adm.Code 4901:1-21-03(A), 4901:1-21-03(C), 4901:1-21-05(C), 4901:1-29-03(A), 4901:1-29-03(D), 4901:1-29-05(C), and 4901:1-29-05(D)," PUCO said

PUCO said, "We find the record evidence shows that RPA violated Ohio Adm.Code 4901:1-21-05(C) and 4901:1-29-05(D), which prohibit, respectively, CRES and CRNGS providers from engaging in deceptive or misleading acts, where it provided modified call recordings to Staff in the course of its investigation."

PUCO said, "there is the uncontroverted case of Tyler Beauregard, who was solicited by RPA, declined to enroll, but discovered later a TPV was completed using his name, but by someone who was not him, as was evidenced by Staff at the hearing by way of the TPV recording which featured a voice sharply distinct from Mr. Beauregard’s own."

"We disagree with RPA’s argument that it should not be held responsible for the actions of its vendors where, as discussed previously, RPA holds the certificates and part of having the managerial capability to serve customers includes sufficient monitoring of contracted vendors.," PUCO said

PUCO said, "Concerning Staff’s allegations that RPA mishandled contracts with its customers, including forging signatures, we find the evidence supports Staff’s contentions."

PUCO said, "RPA submits that it did not forge customers’ initials on contracts where its system automatically generates a contract with initials of the customer imprinted and that a copy is then sent to the customer, but RPA does not rely on such documents as proof of consent. RPA asserts that it relies on the completed TPV as proof of consent for enrollment and that it is required to obtain consent by either a completed TPV or a signature on a contract, so it is not in violation where it had a completed TPV which it relied upon. (RPA Ex.1 at 2; RPA Initial Br. at 28-29; RPA Reply Br. at 16-17.) We find this argument unconvincing where Staff submitted cases of falsified recordings for TPVs, as discussed above, and where RPA is not absolved of a violation by not relying upon the product of the violation."

PUCO said, "We agree with Staff that RPA’s TPV recordings are not fully compliant with the Ohio Administrative Code, evidenced by the TPV scripts produced by RPA to Staff, and the various recordings Staff reviewed during its investigation."

"For example, in its review of the recordings, Staff indicated that the Company informs the consumers that a contract will be emailed or texted to them within five business days, when they must be transmitted within one day; and most recordings do not disclose the $5.00 monthly fee, as required under Ohio Adm.Code 4901:1-21-06 and 4901:1-29-06. Further, the evidence supports Staff’s contention that neither the TPV recordings nor the script disclose the factors which impact the monthly variable rate, as required under Ohio Adm.Code 4901:1-21-06(D)(2) and 4901:1-29-06(E)(1). (Staff Ex. 9 at 32-33, Staff Ex. 11 at Footnote 23 Folder, Confidential Attachment 6B.)," PUCO said

PUCO said, "We agree with Staff that RPA resumed in-person marketing without notifying the Commission’s Service Monitoring and Enforcement Department (SMED) before doing so, in violation of both R.C. 4928.02(I) and (L), and R.C. 4929.20, which require regulated entities, such as RPA, to comply with any health and safety order issued by the Commission to protect at-risk populations. Staff proffers numerous cases during which RPA had solicited consumers door-to-door, during which time RPA was required to have informed SMED before resumption, but did not, regardless of its attempts to again shift blame to its vendor."

One notable finding is that PUCO rejected PUCO Staff's allegations concerning how renewable energy claims were presented to customers, as PUCO found in favor of RPA on this issue

PUCO said, "Staff witness Boerstler testified that Staff found RPA noncompliant where its agents informed consumers that their supplied energy through RPA is generated through renewable generation sources. Staff contends that this is not in compliance with the rules where RPA cannot guarantee that the consumer’s residence or business is directly being powered by electricity generated by a renewable resource. RPA challenges this where it states that it follows the standard in its industry by purchasing renewable energy credits, which represents that one megawatt of renewable energy will be placed in the system for each credit (Tr. I at 102-109). We find that, where the Commission’s precedent acknowledges that it is not possible to trace the movement of individual electrons from a generation facility, suppliers are in compliance with the Commission’s rules and regulations where they purchase renewable energy credits to ensure that renewable energy commensurate with the terms of their contracts is injected into the electric grid."

PUCO said, "We find that the evidence shows that RPA has committed numerous violations of the Commission’s rules and regulations prohibiting deceptive and misleading practices in marketing, soliciting, selling, and providing CRNGS and CRES. Further, RPA has failed to meet requirements that it comply with Staff’s investigation of any complaint and that it maintain records to demonstrate its compliance with all Commission rules and regulations, as discussed in subsection C above. The evidence, as discussed above, shows that RPA lacks managerial capability to provide CRES and CRNGS in Ohio. Therefore, the Commission concludes that RPA’s CRES and CRNGS certificates should be rescinded, and RPA should cease operations in Ohio in both marketing and provisioning CRES and CRNGS."

Concerning re-rates, RPA is ordered to provide notice to each customer enrolled from February 1, 2021 to May 1, 2021, informing the customer of the terms of their respective contract, including the type of rate, the date of enrollment, the means by which the customer was enrolled, that the Commission believes the customer may have been misled by RPA during enrollment, and that RPA will return the customer to their utility’s default service. Further, RPA is ordered, for customers enrolled through door-to-door or telemarketing between May 1, 2021, and June 30, 2021, to re-rate those customers back to their respective utility’s default service rate and send notice informing said customers that they will receive a refund of a specified amount. Finally, RPA is ordered to re-rate all customers who filed a complaint with any entity disputing enrollment with RPA starting from February 1, 2022.

PUCO Commissioner Lawrence Friedeman stated, "The decision we render today should serve to underscore the seriousness with which the PUCO takes activities of this nature."

"That said, thousands upon thousands of customers have migrated to competitive suppliers’ products without incident or complaint. I would encourage this larger segment of the competitive community to proceed with unwavering dedication to and focus on regulatory compliance and customer benefit," Friedeman stated

RPA Energy, Inc. also does business as Green Choice Energy

Case 22-441-GE-COI

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