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Pennsylvania to Sanction Retailer for ‘Stonewalling’ on Price Hikes

September 9, 2015 By Cheryl Kaften

Imagine getting a bill from the power company for over $1,400 when your residential invoices usually are no more than $200. That’s what happened to Bob Kiefer of McKeesport, Pennsylvania, several months after he signed up with Blue Pilot Energy, a Las Vegas-based retail energy broker/marketer. What’s worse, when he called to question the bill, the supplier told him that the bottom line was correct because he had not signed up for a fixed rate; his charges had been tied to the going market rates for energy.

That story, recounted to Action News 4 in Pittsburgh last March, is illustrative of the reasons why Pennsylvania Attorney General Kathleen Kane and Acting Consumer Advocate Tanya McCloskey filed a complaint (Docket No. C-2014-2427655) on June 20 with the state’s Public Utilities Commission against Blue Pilot Energy for deceptive customer price hikes.

The original filing included five separate counts against Blue Pilot – among them:

  1. Failing to provide accurate pricing information;
  2. Prices nonconforming to disclosure statement;
  3. 3 Misleading and deceptive promises of savings;
  4. Lack of good faith handling of complaints; and
  5. Failure to comply with the Telemarketer Registration Act.

As part of discovery, the Office of the Consumer Advocate issued an interrogatory to Blue Pilot Energy seeking, “in detail the records compiled or maintained by respondent which concern, refer or relate to costs, expenses, profits, losses, revenues and billing for respondent’s Pennsylvania operations.”

However, Blue Pilot repeatedly failed to respond to discovery deadlines, asserting that the requested information was (1) privileged; (2) not relevant to the subject matter of this proceeding; and (3) would cause unreasonable annoyance and burden to Blue Pilot.

Therefore, in an August 4 order, the complainants again directed Blue Pilot to provide full and complete answers, noting that, “in cases where the commission finds that one of the parties has litigated in bad faith, the commission is empowered to impose sanctions in the form of civil penalties against that party.”

Among other things, Kane and McCloskey alleged that Blue Pilot had not complied with an administrative law judge’s order to, “describe in detail the ‘desired rate of return’ Blue Pilot used in calculating rates for Pennsylvania customers on variable rate plans from March 31, 2012 until December 31, 2014.”

Finally, on September 2, the complainants asked administrative law judges Elizabeth Barnes and Joel Cheskis to enter an order imposing sanctions against Blue Pilot for filing incomplete responses and improper and untimely objections to discovery requests. The complainants asked the administrative law judges to direct that, “it is established in this matter that Blue Pilot’s ‘desired return’ utilized in calculating rates for Pennsylvania consumers is high, and that this fact is not disclosed to consumers in Blue Pilot’s marketing statements or [in] the company’s disclosure statement – and that Blue Pilot shall not be permitted to rebut these findings at hearing or in briefs.”

In addition, the joint complainants have requested the administrative law judges to direct Blue Pilot to pay a civil penalty for each discovery request not fully and completely answered … per the administrative law judge’s Order of August 4, … totaling $900 per day,” for each day from August 14 going forward that Blue Pilot fails to comply with complete responses.

Blue Pilot Energy is a Nevada limited liability company licensed as an aggregator and broker/marketer of retail electricity to residential, small commercial, large commercial, and industrial customers in Pennsylvania. At the time of the filing, more than 232 consumers had complained about their treatment by Blue Pilot. The company formally entered the Pennsylvania energy marketplace in December 2011

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