The Public Utility Commission Thursday approved a settlement under which Respond Power LLC (Respond Power), an electric generation supplier, has agreed to pay more than $5.2 million in consumer refunds and penalties, as well as modify its future marketing and business practices, as a result of alleged deceptive actions against variable rate customers during the “Polar Vortex” winter of 2013-14.
The Commission voted 5-0 to approve a settlement resolving formal complaints against Respond Power which were filed by the Pennsylvania Office of Consumer Advocate and the Office of Attorney General on June 20, 2014, and by the PUC’s Bureau of Investigation and Enforcement on Aug. 21, 2014.
The complaints alleged that Respond Power engaged in misleading and deceptive marketing and advertising practices in regards to its variable rate plan, made misleading and deceptive promises of savings, switched customers without their consent, and failed to provide accurate pricing information.
Under the terms of the settlement, Respond Power is required to take the following actions:
-- Pay a total of $4,112,224.91 in customer refunds in addition to $971,279.45 already provided by the company;
-- Contribute $50,000 to “Hardship Funds” operated by electric distribution companies in the Commonwealth;
-- Pay a civil penalty of $125,000; and
-- Make modifications to its business practices, including but not limited to the company’s marketing and advertising; agent and employee training; and future product offerings that allow Respond Power to offer only fixed price contracts for a period of two years, and prevent the company from charging Pennsylvania customers cancellation or termination fees for variable rate products.
The settlement also specifies that the OCA and the OAG will retain a third-party administrator to handle distribution of the consumer refunds.
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