Under a settlement agreement filed with the Connecticut Public Utilities Regulatory Authority (PURA) on July 9, North American Power, a Norwalk-based third-party provider of electricity, has voluntarily agreed to pay $2.6 million to the nonprofit Operation Fuel, State Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz announced this week.
If approved by PURA, the settlement would resolve a two-year investigation into the company’s marketing practices. PURA opened this proceeding following a number of complaints that North American Power offered a low introductory rate to customers that was quickly replaced by a variable rate that was substantially higher than market or standard service rates.
The $2.6 million in charitable donations to Operation Fuel would be made in equal payments of $100,000 over 26 months, beginning within 30 days of PURA’s approval of the settlement and closing of the investigatory proceedings. The Hartford, Connecticut-based nonprofit recipient agency partners with communities, businesses, government, and individuals to ensure people in need have access to year-round energy assistance.
Attorney General Jepsen commented in the official release. “Going forward, North American Power is subject to the significant new laws governing all electric suppliers that do business in the state of Connecticut that the legislature has enacted in the past couple of years.”
New legislation has directed PURA to develop regulations on marketing and sales practices, standard contract requirements and standard billing formats. The legislation was passed as a result of a large number of consumer complaints about the practices of various third-party electric suppliers.
Specifically, a bill passed in May 2014 that prohibits suppliers from raising rates for the first three billing cycles of new contracts entered as of July 1, 2014. The bill also requires electric suppliers to notify residential customers in advance of certain rate changes and prohibits them from charging cancellation or early termination fees to residents who move within the state and do not change suppliers
Consumer Counsel Katz said. “This office continues to believe that variable rates can mislead residential consumers into paying more than necessary for energy, and I urge consumers to avoid them.”