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State regulators agreed to settle a complaint with a third-party electric supplier for half of its original fine despite pleas from the Attorney General and Office of Consumer Counsel to fight the company in court. The company’s sales agents were found to have routinely misled people into signing contracts.
After the Public Utility Regulatory Authority decided to fine Discount Power $2 million over what regulators described as “grave, systemic” violations of state marketing laws, the Shelton-based company appealed the fine to Superior Court.
The company had argued that the fine and a three-year suspension of its license to operate in Connecticut should be overturned because regulators found only 50 customers enrolled by the company in violation of marketing laws, but then extrapolated those findings across the company’s 12,168 customers.
Discount Power also argued that PURA did not offer any evidence that the company was “currently” out of compliance with marketing laws, given that the violations dated to 2018 and 2019, and the company stopped telemarketing in Connecticut in 2019. It also said PURA retroactively applied marketing laws that were passed in 2020.
PURA and Discount Power agreed to a settlement requiring the company to pay a total of $1 million to Eversource and United Illuminating, which the companies will use to pay the arrearages of their hardship customers with the largest unpaid bills – instead of paying a $2 million fine to Operation Fuel.
In the settlement agreement, Discount Power also agreed to permanently withdraw from the Connecticut electric supplier market – instead of a suspension of three years.
The settlement also rolled back a requirement that Discount Power pay restitution to every customer enrolled in 2018 and 2019, equal to the amount of money they would have saved if they paid the standard supply rate charged by Eversource and United Illuminating. Discount Power argued that rule was “arbitrary and capricious” given that PURA only found violations with residential customers who signed up through telemarketing.
In a letter to PURA, Assistant Attorney General John Wright wrote that there is no evidence to quantify how much Discount Power actually overcharged its customers in 2018 and 2019, but said it was likely far larger than $1 million – possibly even multiples of the settlement amount.
“Approving the proposed settlement would mean that Discount will have profited – and profited handsomely – from the many egregious statutory and regulatory infractions detailed by the Authority,” Wright wrote. “This simply sends the wrong message to Discount and the electric supplier market as a whole.”
Wright wrote that if Attorney General William Tong had been consulted, he would have told PURA he was confident that its original penalty would have held up on appeal. The Office of Consumer Counsel agreed, and said a settlement is “a missed opportunity for customer relief,” – especially because it drops the restitution requirement.
PURA said the permanent removal of Discount Power from the Connecticut supplier market is a “significant benefit” to Connecticut electric customers, and lets PURA focus its enforcement resources elsewhere.
“This removal eliminates both the risk of Discount’s continued operations in Connecticut, and the regulatory burden imposed on the Authority to continually monitor a company found to have committed statutory violations,” PURA said.
PURA also noted that the Attorney General and Consumer Counsel could still pursue full restitution for Discount Power’s customers under the state’s marketing laws.