Attorney General Announces Electric Generation Supplier Settlement Proposal

Attorney General Kathleen G. Kane and Acting Consumer Advocate Tanya J. McCloskey today announced a proposed settlement with an electric generation supplier accused of deceptively marketing its variable electric rates to Pennsylvania consumers, many of whom filed complaints about spikes in their rates during the winter of 2014.
Under the settlement, Energy Services Providers Inc., which does business as Pennsylvania Gas and Electric (PaG&E), has agreed to pay $2.3 million in refunds to eligible consumers in addition to the $4.5 million the company has already paid. The corporation must also pay a civil penalty of $25,000 and make a contribution of $100,000 to the Electric Distribution Companies’ hardship funds.

The settlement is the result of a joint legal action filed against the company by the Office of Attorney General’s Bureau of Consumer Protection and the Office of Consumer Advocate.

Consumers who were on variable rate plans in January, February or March of 2014 will be contacted directly by a third-party settlement administrator if they qualify for a refund. The refunds will be based on consumers’ usage and the price they were charged during that time period. Refunds already received will be a factor in any additional refunds.

The settlement also imposes an 18-month moratorium on the selling of variable rates by PaG&E. The company must offer fixed-rate products for terms longer than six months during this time period, which started March 1.

Should the company begin to offer variable rate contracts in the future, PaG&E will be required to disclose to consumers in plain language that prices may fluctuate monthly.

The proposed settlement requires approval by the Administrative Law Judges and by the Public Utility Commission. It resolves one of five legal actions filed jointly against electric generation suppliers by the Office of Attorney General’s Bureau of Consumer Protection and the Office of Consumer Advocate. The other four actions are still in litigation.

Consumers with questions about the settlement may contact the Bureau of Consumer Protection at (800) 441-2555.
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