Retail Supplier To Exit State Under Settlement With PUC Staff

Settlement Includes $355,000 Fine

Allegations Arise, In Part, From Multiple Sales Calls To PUC Staffers

September 25, 2024

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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Realgy Energy Services (Realgy or Company) has agreed to wind-down its retail electric and gas businesses in Ohio and to exit the state's retail energy markets under a settlement with Staff of the Public Utilities Commission of Ohio

Specifically, Realgy agrees that it shall not operate as a retail energy supplier in Ohio beyond the expiration date of its current licenses. Realgy's licenses expire on December 16, 2024 (gas) and December 17, 2024 (electric), although the settlement allows Realgy to seek an extension of the licenses solely for the purpose of completing the wind-down process, if needed

During the wind-down period, Realgy agrees not to enroll new customers. Realgy agrees to immediately suspend all marketing and enrollment activity.

During the wind-down period, Realgy's variable rates may not exceed the applicable default service rate

Realgy agrees not to seek renewal of its supplier licenses

Moreover, Realgy, "and its officers", agree to never "refile" in the state of Ohio.

The settlement also states, "Realgy and/or any of its owners or principal officers will not apply to operate as a Competitive Retail Natural Gas or Electric Service provider in the state of Ohio," with no specific time limit attached to this prohibition as written in the copy of the settlement as filed. The term provider in Ohio generally refers to any entity offering Competitive Retail Natural Gas Service or Competitive Retail Electric Service, and includes aggregators, brokers, and power marketers, in addition to retail suppliers

However, immediately after this stated prohibition, the settlement describes "This stay-out period..." but does not indicate an end date for the period (only a start date). It is unclear if the stay-out refers to the prohibition on Realgy's owners or principal officers applying for a gas or electric license, or is an unrelated term

A prior Staff notice of probable noncompliance issued to Realgy in January 2024 had suggested a stay-out provision of five years applicable to Realgy and/or any of its owners or principal officers

Realgy will pay refunds, in the amount described below, to two groups of customers: (1) to all customers enrolled by telephone from October 2022 through present, and (2) to all customers who filed a complaint, with PUCO, Realgy, or "other entity" (with the settlement parenthetically referencing the customer's utility and Better Business Bureau) disputing their enrollment, from October 2022 to present

For all customers, Realgy shall refund to customers "double" the difference between what the customer paid Realgy versus the cost under the applicable default service rate, over the entirety of the customer's service with Realgy within the period stated above, unless the customer's cost was less under Realgy

Realgy under the settlement would pay a civil forfeiture of $355,000

The settlement would resolve a notice of probable noncompliance (PNC) issued by Staff to Realgy that had alleged several "misleading and deceptive" practices

Notably, Staff alleged, among other things, that two members of Staff, in addition to other consumers filing complaints, received sales calls from Realgy that included a "prerecorded" message

Staff alleged that these calls began with a recording stating that the call was from the utility, that customers were being overcharged, and that customers could save 35%

Staff further alleged:

• Realgy agents allegedly stated that they were from the utility or the "government"

• Realgy agents were alleged to promise savings that Staff alleged were not or could not have been realized by the consumer. Staff alleged an example in which Realgy allegedly described its price as "competitive" against both the utility and other suppliers, and allegedly informed the customer that, had the customer been with Realgy, their rate would have been $0.156/kWh in the prior month. Staff alleged that Toledo Edison’s SSO rate at the time was $0.057619/kWh.

• Realgy allegedly spoofed its phone number to appear as the local utility or someone with a local telephone number

In the PNC, Staff alleged that, "Staff believes Realgy is manipulating sales calls and TPVs," with Staff alleging, among other things, that records provided by Realgy did not include in such records information alleged to have been included on the sales calls with the two PUCO Staffers

Staff alleged, "In many of the sales calls related to consumer complaints, the sales agent appeared to have followed a script; however, the call did not sound like a natural conversation. For instance, the interaction includes the sales representative asking the consumer questions, and the consumers only provide one-word responses such as 'yes' or some other form of agreement. There are no interruptions and consumers do not ask any questions. In Staff’s experience of reviewing sales call recordings, when sales representatives are giving consumers a lot of information, are difficult to understand, and are speaking at a fast pace, consumers typically ask questions. In many of the calls, the sales representatives instruct consumers to write down information such as their customer service number, and not one of those consumers asked for the number to be repeated. When listening to some calls, Staff noticed either the consumer’s voice changes, or it sounds like someone is impersonating the consumer."

Staff alleged that Realgy did not send terms and conditions to customers within one business day of enrollment as required

Among other things, Staff alleged that the behavior described above violated relevant provisions of the Ohio Adm.Code that prohibit unfair, misleading, deceptive or unconscionable acts or practices (including Ohio Adm.Code 4901:1-21-03(A))

Staff also alleged violations of the rules applicable to enrollments and verification, and the anti-slamming rules

Case 24-918-GE-UNC

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