Press Release

PUC Rejects Proposed MXEnergy Settlement Agreement over Marketing Practices

Published on 3/29/2012

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today rejected a proposed settlement agreement between the Commission’s Law Bureau Prosecutory Staff (now the Bureau of Investigation and Enforcement) and MXEnergy, a PUC-licensed electric generation supplier, over the company’s marketing practices.

“The Commission has made it clear on numerous occasions that it will not tolerate unlawful activity that threatens to harm the burgeoning retail electricity market in Pennsylvania,” said PUC Chairman Robert F. Powelson and Commissioner Wayne E. Gardner in the motion.

The Commission voted 5-0 to approve a joint motion by PUC Chairman Powelson and Commissioner Gardner rejecting the settlement agreement filed by the parties and referred the matter back to the Law Bureau Prosecutory Staff for any further actions they deem to be warranted.

On Nov. 4, 2010, the PUC’s Prosecutory Staff initiated an informal investigation of MXEnergy focusing on the company’s marketing of its residential electric generation supplier services, specifically its door-to-door sales practices.  This action was taken as a result of a referral by the PUC’s Office of Competitive Market Oversight, based on information that Gateway Energy Services Corp. had filed a federal lawsuit against MXEnergy.  In that suit, Gateway alleged that certain third-party independent contractors representing MXEnergy engaged in “slamming,” with the intent to confuse or deceive four of Gateway’s existing customers into terminating their existing contracts with Gateway and entering into new contracts with MXEnergy. Slamming is the illegal practice of switching a consumer's electric generation service without permission.

The proposed settlement agreement states that, had this matter been litigated, Prosecutory Staff would have alleged 22 instances of slamming.  In order to address these allegations, MXEnergy agreed to pay an $11,000 penalty and take certain corrective actions.

“We simply do not believe that a $500 per-customer penalty, even when combined with the corrective actions, is enough to remedy this situation or to deter potential future violations of the Code or the Commission’s regulations by an electric generation supplier,” added Powelson and Gardner.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.

 For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.state.pa.us.

Docket Number M-2012-2201861

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov