Press Release

PUC Finalizes Penalties for PaG&E Over Deceptive Marketing and Billing Practices

Published on 3/18/2016

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today confirmed the finalization of sanctions against Pennsylvania Gas & Electric Company (PaG&E) for alleged deceptive actions during and after the “Polar Vortex” in the winter of 2013-14. An Order approving a Joint Petition for Settlement directs the company to issue a total of $6.8 million in customer refunds, pay a $25,000 civil penalty, contribute $100,000 to electric distribution companies’ (EDCs’) Hardship Funds and modify its marketing practices.

At its Feb. 11 Public Meeting, the Commission voted 5-0 to adopt a Joint Motion modifying a Joint Petition for Settlement between PaG&E, the Office of Attorney General (OAG), the Office of Consumer Advocate (OCA) and the Commission’s independent Bureau of Investigation and Enforcement (I&E) and seeking comments from the parties of the settlement on the amended Tentative Order. Among other things, the Joint Motion modified the settlement obligations of OAG and OCA by requiring them to provide a specific notice to customers who elect to receive payment from a refund pool established by the settlement. No comments were filed, making the Order final without further action by the Commission.

OAG and OCA filed a joint formal complaint against PaG&E on June 20, 2014, which alleged that the company misled customers with deceptive promises of savings; engaged in “slamming,” or the unauthorized enrollment of a customer; mishandled customer complaints; failed to provide accurate pricing information; charged different prices than listed in customer disclosure statements; and failed to comply with the Telemarketer Registration Act.

The settlement directs the following actions by the company:

• Provide refunds to customers, honoring all commitments to rebate programs, guaranteed introductory rates, service agreements for repair and maintenance and incentive offers;
• Pay a $25,000 civil penalty;
• Contribute $100,000 to EDCs’ Hardship Funds; and
• Make numerous modifications to its business practices related to product offerings, marketing, third-party verifications, disclosure statements, training, compliance monitoring, reporting and customer service.

The total refund pool amounts to $6,836,563, including $4,511,563 that the company previously and voluntarily paid in cash refunds. The net refund pool effective with today’s approval is $2,325,000.

The Attorney General’s Bureau of Consumer Protection (BCP) and OCA will determine which customers were affected by the company’s misconduct between January and March 2014 and determine refund amounts, accounting for usage, price charged and refund amounts already received directly from PaG&E. BCP and OCA will utilize a third-party administrator to distribute the refunds. The administrator is required to provide a notice to each refund recipient stating that signing a Release of Claims and receipt of payment may affect a customer’s right to recover amounts for the same conduct of PaG&E that could result from court proceedings against the supplier.

The administrator will use best efforts to distribute all refunds within 180 days of the Final Order. Customers who do not receive – or are not satisfied with – the offer by BCP and OCA may contact PaG&E directly to request a refund. Consumers with questions about the settlement may contact BCP at 1-800-441-2555.     

I&E is the independent enforcement arm of the PUC. To satisfy due process of law under the Pennsylvania Constitution, separation is required between staff involved in investigatory and prosecutory functions and the Commissioners involved in decision making. As a result, the Commissioners can examine each case with an unbiased perspective.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility. “Like” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

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Docket No. C-2014-2427656

Contact:

• Deputy Press Secretary
  717-787-5722