Boston-based third-party electric supplier Sunwave Gas & Power has been banned from operating in Connecticut after state regulators found that the company abruptly canceled contracts with customers, forcing them to pay the higher electric supply rates offered by their utilities.
Despite objections from Sunwave that the company has “no customers, no revenue, and no cash,” and no ability to pay sanctions, PURA on Wednesday ordered the company to pay all of its former customers $20 for each month that remained on their contracts when they were canceled.
PURA also ordered Sunwave to pay a $1 million fine, almost all of it to Operation Fuel, and revoked its license to sell power in Connecticut’s deregulated electricity market – where customers can shop for suppliers other than Eversource or United Illuminating, though PURA has warned those customers often end up paying more.
“[Sunwave’s] supposed inability to properly compensate customers for the financial harm customers have incurred does not mitigate the gravity of the harm,” PURA said in its decision. “Sunwave’s actions have resulted in a direct economic impact to customers. That Sunwave has so mismanaged its finances to be unable to provide restitution is no salve to these customers and no basis for tempering sanctions.”
In January, the regional grid operator ISO-New England suspended Sunwave from operating in the market, because the company had missed six consecutive payments to ISO, totaling more than $1 million. That forced Sunwave to cancel its contracts with over 1,000 customers who had signed on with the company because it was offering rates lower than the standard service charged by the utilities.
PURA’s Office of Education, Outreach and Enforcement – which has been tasked with stepping up enforcement of Connecticut’s third-party electric suppliers – said that Sunwave didn’t notify its customers or PURA that it was suspended from the market.
The office said Sunwave didn’t remove its rate offering from the Energize CT rate board, where customers can shop for third-party suppliers, until it was questioned by regulators 10 days after ISO-New England suspended the company.
One Sunwave customer told PURA that he was informed by Eversource that Sunwave could no longer keep its agreement with him, and that he would have to pay Eversource’s standard rates that were “substantially higher.” He told PURA that he expected he will pay $450 to $500 more for electricity over the next two years as a result.
In June, PURA found Sunwave violated state law by continuing to advertise rates for a service it knew it could not provide. The regulator ordered Sunwave to pay those customers restitution within 20 days, and when it didn’t, PURA revoked the company’s license and ordered a $1 million fine.
Laura Jurasek, who is responsible for regulatory compliance at Sunwave, told PURA that the company was already struggling financially due to COVID when the regional grid operator suspended Sunwave, forcing it to end service to its customers.
Jurasek said Sunwave has more than $7 million in liabilities, and that the $1 million in revenue it earned before ceasing operations in February was less than the company’s costs. She said the company wasn’t “flagrantly refusing” to pay restitution to customers that PURA ordered in June, but the company does not have any cash.
“Sunwave did not provide restitution to customers because it simply did not have the financial capability to do so,” Jurasek said.
PURA was not swayed by that argument, saying the company didn’t raise an issue with its financial condition when it was first ordered to pay back customers in early June. PURA also said Sunwave didn’t provide any evidence of its financial condition, and has not filed for bankruptcy.