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PUC Says Its Ready To Ratchet Up Penalties, In Warning To Retail Suppliers
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A majority of Commissioners on the Public Utilities Commission of Ohio are ready to "ratchet up" penalties and other remedies against retail energy suppliers for misconduct, Commissioners said today in approving a settlement concerning alleged "egregious" behavior from a retail supplier
As discussed further below, PUCO adopted today without modification a settlement between PUCO Staff and Realgy Energy Services (Realgy or Company) under which Realgy agreed to wind-down its retail electric and gas businesses in Ohio and to exit the state's retail energy markets (the wind-down is discussed further below)
As first reported by EnergyChoiceMatters.com, Realgy under the now-adopted settlement shall refund to certain 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 a period covered by the settlement (unless the customer did not pay more than the SSO cost under Realgy service). Refunds will be provided 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
Realgy under the settlement will pay a civil forfeiture of $355,000
The alleged behavior addressed by the settlement is fully detailed in our prior story here
In brief, PUCO Staff had alleged, among other things, that Realgy sales calls had included the following alleged behavior:
• 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
Furthermore, 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
Commissioner Daniel Conway said that the allegations in the case are "particularly egregious" and, "beyond startling...beyond the pale".
Conway hopes that the terms of the settlement send a clear message that, "We are not going to tolerate the kind of behavior," alleged in the case
Conway is, "prepared to ratchet up the remedy, the penalties, to try to get to a point where the message does get received."
In prepared remarks, while Commissioner Lawrence Friedeman called all of the allegations "troubling," Friedeman in particular said, regarding the alleged manipulation of sales calls records, that, "any manipulation and subsequent submission of data which is
intended to obfuscate the nature and scope of the shortcomings
being investigated is intolerable."
Friedeman also highlighted the settlement's provisions requiring Realgy to pay "double" refunds to customers -- or two times the difference between the customer's cost under Realgy versus the cost under default service, as noted above
Friedeman said this double refund is "unique" to date, and warned that this 2x multiplier used in the Realgy case could increase "dramatically" in the future, "depending on the nature of any future aberrant
behavior," by a retail supplier
PUCO Chair Jenifer French concurred with both Friedeman's and Conway's comments
"The PUCO will continue to diligently monitor the marketplace to ensure suppliers are not taking advantage of Ohioans," French stated
Concerning the wind-down of Realgy's Ohio business under the settlement, 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 agreed to immediately suspend all marketing and enrollment activity.
During the wind-down, 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.
As previously reported, the settlement 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 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
Case 24-918-GE-UNC
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PUC Approves $355,000 Fine For Supplier, "Double" Refunds
November 14, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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