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Respond Power to Refund Over $5 Million for Deceptive ‘Polar Vortex’ Pricing

The Pennsylvania Public Utility Commission (PUC) approved a settlement (Docket Nos. C-2014-2427659,C-2014-2438640) on August 11 under which Respond Power an electric generation supplier, has agreed to pay more than $5.2 million in consumer refunds and penalties, as well as to modify its future marketing and business practices, as a result of alleged deceptive actions against variable rate customers during the “Polar Vortex” winter of 2013-2014.

The commission voted 5-0 to approve the settlement, resolving complaints that were filed by the Pennsylvania Office of Consumer Advocate (OCA) and the Office of Attorney General (OAG) on June 20, 2014, and by the PUC’s Bureau of Investigation and Enforcement two months later.

The complaints alleged that Respond Power engaged in misleading and deceptive marketing and advertising practices in regards to its variable rate plan, made misleading and deceptive promises of savings, switched customers without their consent, and failed to provide accurate pricing information.

Specifically, under the terms of the commission’s decision, Respond Power is required to:

  • Pay $4.1 million in customer refunds in addition to $971,000 already provided by the company;
  • Contribute $50,000 to “Hardship Funds” operated by electric distribution companies in the Commonwealth;
  • Pay a civil penalty of $125,000; and
  • Make modifications to its business practices, including but not limited to the company’s marketing and advertising; agent and employee training; and future product offerings that allow Respond Power to offer only fixed price contracts for a period of two years, and prevent the company from charging Pennsylvania customers cancellation or termination fees for variable rate products.

The settlement also specifies that the OCA and the OAG will retain a third-party administrator to handle distribution of the consumer refunds.

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