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Connecticut Orders Retailer Palmco to Tell Customers How to Switch to Standard Service

March 17, 2016 By Cheryl Kaften

Connecticut Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz on March 9 welcomed an interim decision (Docket No. 10-01-24RE01-interim decision) from the state’s Public Utilities Regulatory Authority (PURA) ordering  retail electric supplier Palmco Power-CT to issue notices to all of its existing customers advising them how to immediately switch to the standard offer provided by either of the state’s two regional electric distribution companies,  Eversource Energy or United Illuminating.

In January 2016, Palmco served about 2,550 customers, the majority of whom paid more than twice the standard service rate offered by their utility company, according to the AG.

PURA opened an investigation into consumer complaints about the company’s practices in February 2015. In its interim decision, PURA noted that many Palmco customers may even not be aware that they have been enrolled with the company or of the high rates they are currently being charged.

Specifically, PURA said that the record in the investigative proceeding showed evidence that consumers:

  • May not have been informed of Palmco’s rates at the time of enrollment;
  • May have been provided inaccurate information during door-to-door and telemarketing sales;
  • May have been led to believe that enrolling with Palmco would guarantee savings;
  • May have been led to believe they were dealing with Eversource or United Illuminating personnel; and
  • May have been enrolled due to forgery.

PURA said, given the record in the investigative proceedings, it was in the public interest to require Palmco to notify its customers.  The order directs the company to send either first-class mail or email correspondence, in a form dictated by PURA, to each customer – advising that party of how to switch to the standard offer. The notice must be issued no later than March 25,

“I commend PURA for granting my office’s motion and ordering these consumer notices,” said Attorney General Jepsen. “The conduct detailed in this proceeding is deeply troubling. The evidence in the record shows systemic and pervasive misconduct in Palmco’s marketing its product and enrolling its customers. It has also led to substantial overpayments for thousands of Connecticut consumers. My office will continue to actively participate in PURA’s docket and seek to hold this company accountable for its apparent deceptive and unfair practices.”

“The evidence shows Palmco has been taking money out of their customers’ pockets for years, so I fully support PURA’s interim decision requiring the company to inform their customers that they have better options,” commented Consumer Counsel Elin Swanson Katz, adding, “We’ve also seen that, in many cases, consumers were subjected to a high-pressure sales pitch and given false information to entice them to enroll with Palmco. My office has been actively engaged in this proceeding, which has revealed abusive sales practices affecting potentially vulnerable populations. Such underhanded sales practices have no place in the Connecticut retail electric marketplace, and we will continue to pursue retail electric suppliers that mislead customers into overpaying for electricity.”

Attorney General Jepsen and Consumer Counsel Katz strongly urge all Connecticut residents to examine their electric bills carefully to determine if the standard offer is more appropriate for them.

“It is important that all electric customers in Connecticut check their bills and make sure they know the generation rate that they’re being charged, whether that rate is fixed or variable and whether there is a termination fee associated with switching from that rate,” Attorney General Jepsen said. “A large number of Connecticut consumers are paying more than they have to for electricity. While it’s possible to save money on electric costs by shopping in the electric market, standard service is the easiest – and often the most affordable – option for the vast majority of electric customers. The good news is that switching to standard service is easy, and consumers who find that they are paying a high generation rate can take steps immediately to lower their electric bills.”

“You never have to switch from the standard service option, no matter what a salesperson tells you,” Consumer Counsel Katz said. “Despite the implementation of massive reforms in this market, this investigation shows that there are still unscrupulous marketers out there willing to say just about anything to get your business. Don’t make a snap decision to switch because of a phone call or someone knocking on your door with a ‘too-good-to-be-true’ offer.” She urged consumers to check available offers through the Connecticut Rate Board at EnergizeCT.com or by calling 1-877-WISE USE (877-947-3873) before making a switch with respect to their electric bill.

In response to the interim ruling, Palmco issued a statement, picked up by Energy Choice Matters, as follows: “PALMco is surprised and disappointed by today’s press release from the Connecticut Attorney General and Consumer Counsel (OCC) seeking to take credit for an action that was offered by PALMco nearly four months ago. As both agencies are fully aware PALMco voluntarily offered to do exactly what PURA has now ordered. To its knowledge, all of PALMco’s service offerings were lawful and condoned by the Connecticut State Legislature. If the AG and OCC want to ban third party suppliers from competing in Connecticut, they should seek a change in the law. PALMco is fully participating in the review of its practices and is prepared to make changes where needed to better serve Connecticut consumers. PALMco is a family owned and operated business committed to quality customer service and stands by our customers’ legal right to choose their source of power supply.”

Consumers may contact their utility company to switch to the standard offer within 72 hours of their request. Eversource’s standard service rate is currently 9.55 cents per kilowatt hour (kWh); United Illuminating’s standard service rate is currently 10.73 cents/kWh.

 

The docket remained open, with additional hearings scheduled for March 15 and 16 and with a final decision expected in June 2016.

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