Constellation To Pay $160,000, Contribute $66,000 In Bill Payment Assistance, Under Settlement With Texas PUC Staff To Resolve Alleged Disconnection, Other Violations

October 27, 2023

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

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Constellation NewEnergy, Inc. (Constellation) would pay an administrative penalty of $160,000, and contribute $66,825 to a bill payment assistance program administered by BakerRipley, under a settlement with Staff of the Public Utility Commission of Texas to resolve alleged violations of 16 TAC §§ 25.474, 25.475, 25.483 and 25.485, including alleged violations concerning disconnections

The settlement states that Constellation also voluntarily issued $432,960 in credits, refunds and incentives to customers to mitigate the impact of the alleged violations

Constellation provided the following statement concerning the matter:

"At Constellation, customer service is our top priority. We take our regulatory obligations as a Retail Electric Provider seriously and we have a strong record of compliance in Texas for over 20 years. During our efforts to improve customer service, we experienced enrollment and processing issues with a newly implemented digital interface. Once identified, we immediately notified impacted customers, promptly took corrective actions, and self-reported inadvertent temporary disconnections to the Public Utility Commission of Texas (PUCT). Constellation cooperated fully with the PUCT and believes this agreement represents a fair resolution."

--- Statement from Constellation

The settlement states, "In April of 2022, Constellation deployed a new cloud-based interface between customer facing and back-office systems (System Integration) to improve the customer experience and customer service. However, there were a number of processing and system logic issues after deploying the System Integration."

The settlement states, "In November of 2022, Constellation proactively contacted Commission Staff to self-report the temporary disconnection for non-payment of certain customers prior to the disconnection date on their disconnection notice or prior to their receipt of a disconnection notice."

Under 16 TAC § 25.483(c), a REP having disconnection authority may authorize the disconnection of a customer’s electric service for failure to pay any outstanding bona fide debt for electric service owed to the REP only after proper notice is given and not before the first day after the disconnection date in the notice.

The settlement states, "In 2022, Constellation temporarily disconnected 89 customers for non-payment either prior to the disconnection date in their disconnection notice or prior to their receipt of a disconnection notice. None of the reasons for disconnection were related to circumstances enumerated in 16 TAC § 25.483(d) [related to the authorization for disconnections without prior notice."

According to 16 TAC § 25.474(k), a REP shall submit a move-in or switch request to the registration agent so that the move-in or switch will be processed on the approximate scheduled date agreed to by the applicant and as allowed by the tariff of the transmission and distribution utility (TDU), municipally owned utility, or electric cooperative. In addition, a REP shall submit an applicant’s switch request as a self-selected switch if the applicant requests a specific date for a switch, consistent with the applicable transmission and distribution tariff.

The settlement states, "In June 2022, a Constellation System Integration issue resulted in not processing 192 applicants’ enrollments using the requested switch date."

The settlement states, "In July 2022, a Constellation System Integration issue resulted in not processing 336 switch requests that were received on a Sunday to ERCOT by the next business day."

Under 16 TAC § 25.475(c)(1)(A), all written, electronic, and oral communications, including renewal contract documents, distributed by a REP or aggregator must be clear and not misleading, fraudulent, unfair, deceptive, or anti-competitive.

The settlement states, "In April 2022, a Constellation System Integration issue resulted in not communicating to 297 customers that they had accepted an expired renewal offer, which resulted in their automatic enrollment into a default variable rate renewal product."

Under 16 TAC § 25.475(d)(2)(A), a REP may only change the price of a fixed rate product or a variable rate product consistent with the definitions in 16 TAC § 25.475(b) and according to the product’s energy facts label (EFL).

The settlement states, "In 2022, a Constellation System Integration issue resulted in the inadvertent invoicing of 1,292 customers during their first billing cycle after rolling on to a default renewal product at a rate that did not match the rate disclosed on the customers’ EFL."

Under 16 TAC § 25.475(e) (effective May 13, 2018), for fixed rate contracts entered prior to September 1, 2021, a REP shall send a written notice of contract expiration at least 30 days or one billing cycle prior to the date of contract expiration, but no more than 60 days or two billing cycles in advance of contract expiration for a residential customer, and at least 14 days but no more than 60 days or two billing cycles in advance of contract expiration for a small commercial customer.

Under 16 TAC § 25.475(e)(1)(A) (effective January 6, 2022), for fixed rate contracts entered on or after September 1, 2021, with a term of more than four months, a REP must provide the customer with at least three written notices of the date the fixed rate product will expire, with the final notice must be provided at least 30 days before the date the fixed rate contract will expire

The settlement states, "During the months of June, July, and August 2022, a Constellation a System Integration issue resulted in the issuance of 34 contract expiration notices less than 30 days or one billing cycle in advance of the contract expiration date to residential fixed rate customers who entered their contract prior to September 1, 2021."

The settlement states, "During the months of June, July, and August 2022, a Constellation System Integration issue resulted in the issuance of 10 final contract expiration notices less than 30 days prior to the expiration date to residential fixed rate customers who entered a contract with a term of more than four months on or after September 1, 2021."

Under 16 TAC § 25.485(e)(1)(D), a REP must investigate all informal complaints and advise the Commission in writing of the results of the investigation within 21 days after the complaint is forwarded to the REP.

The settlement states, "From October 1, 2022, to March 1, 2023, Constellation provided responses to 21 informal complaints forwarded to Constellation from the Commission’s Customer Protection Division after the 21-day response deadline."

The settlement details approximately a dozen corrective actions Constellation has taken to prevent future violations, including various IT updates, and regular compliance meetings

The settlement states, "Constellation has updated the IT logic to allow for quicker enrollment transmissions to ERCOT and to affirm that the price offered on the EFL for the default renewal product is consistent with the price charged during the first month’s billing cycle. Constellation has also added logic to the enrollment system to automate the review of the data exchange and identify accounts that were not transmitted to the fulfillment system. Constellation indicates they are holding regular compliance meetings to identify, track, and resolve potential compliance issues related to its System Integration. Constellation has simplified its system design to make the system easier for agents to navigate and re-trained all agents. Constellation has run regular reports to crosscheck disconnects prior to submission to the TDU. Constellation has implemented a new customer care tracking database to improve tracking of informal complaints and response times. Lastly, Constellation has conducted Texas-specific complaint meetings to address open items and process improvement opportunities."

The settlement states that Constellation's contribution of $66,825 to a bill payment assistance program administered by BakerRipley is in addition to any amount the REP had already planned to make during the applicable fiscal year

Docket 55725

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