In a move that Public Utility Regulatory Authority Chair Marissa Gillett said shows the benefits of her restructuring of the state’s utility regulator, the third-party electric supplier Clearview will pay a $500,000 penalty and leave Connecticut’s energy supplier market for six years to settle claims that the company repeatedly violated marketing laws and in several cases, charging customers higher rates than they should have.
The Clearview settlement marks the third time the Public Utility Regulatory Authority’s Office of Education, Outreach and Enforcement has settled claims that third-party suppliers violated marketing regulations since PURA Chair Marissa Gillett started the office in July 2020 – resulting in all three suppliers temporarily or permanently withdrawing from Connecticut’s electric supplier market, and paying a total of $1.73 million in fines and penalties.
The $500,000 penalty charged to Clearview will be directed toward Eversource and United Illuminating as partial compensation for their customer’s substantial unpaid bills, which will slightly reduce what the two utilities will seek to recoup through higher rates. The company will also have to reimburse its customers who paid more for electricity from Clearview than they would have by paying the standard rate for Eversource or United Illuminating.
In Connecticut’s deregulated electric supplier market, customers can choose to buy their electric supply directly from a third-party provider, instead of paying the standard rate charged by their utility.
It’s a popular option for Connecticut ratepayers seeking relief from some of the highest electric rates in the country – about 272,000 Eversource and United Illuminating customers used a third party supplier in 2020 – but it often leaves customers paying more than they would have under their standard supply rate.
According to the state Office of Consumer Counsel, customers using third-party suppliers paid about $240 million more than they would have between 2015 and 2019. The office also warned third-party suppliers tend to market heavily to “vulnerable populations,” including poor residents, older residents, disabled residents, and residents who speak English as a second language.
Gillett credits new office for stepped up oversight
According to Gillett, the Office of Education, Enforcement and Outreach was created provide an office that is “firewalled” from other regulatory staff, to allow a better dialogue with residents and regulated utility companies than would otherwise be possible. In most circumstances, PURA staff, like a judge in court, are limited in what they can say outside of a formal proceeding.
The office’s responsibilities include communication with the public – including taking customer complaints – as well as investigating regulated companies like third-party electric suppliers.
Gillett told CT Examiner that the structure of the “EOE” closed the feedback loop between customer complaints and enforcement, allowing the enforcement staff in the office to “treat customer complaints as actionable information.”
In the case of Clearview, PURA acted on a series of 12 complaints against the company made between February 2020 and July 2014 to allege six separate violations of state marketing laws.
Before the office was created, PURA could designate one or more staff members to serve as “prosecutorial staff” on a particular docket. Gillett said that process could be effective, but it didn’t ensure there was continuity in how each case was approached, and didn’t allow for monitoring between active investigations.
Between 2017 and when the EOE started in July 2020, PURA used that process to settle violations with three third-party electric suppliers – with penalties totaling $90,000, according to the Authority.
According to the Office of Consumer Counsel, there were a total of ten enforcement actions against third-party suppliers in that timeframe, though many of those settlements were negotiated by the Attorney General and Consumer Counsel offices – a practice Gillett has criticized in other cases as sidestepping PURA’s authority.
“In short, the prior structure placed PURA in a more reactive posture, while the formation of EOE allows for routine and proactive monitoring of compliance with Authority orders, regulations and state law.” Gillett said. “The structure of EOE also mitigates the potential for continuing and/or unintentional violations by allowing for a routine, unencumbered exchange of information, since staff assigned to EOE can communicate freely with parties and members of the public.”