July 26, 2012

Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz today jointly petitioned the Public Utilities Regulatory Authority (“PURA”) for an investigation into a Connecticut-licensed energy supplier that may have engaged in deceptive marketing tactics in soliciting customers.

In their petition, Attorney General Jepsen and Consumer Counsel Katz ask PURA to commence an investigation into the manner of operation and conduct of Energy Plus Holdings, LLC, following multiple consumer complaints and a review of some company marketing and solicitation materials that appear to demonstrate a pattern of misrepresentation.

“Under state law, electric suppliers must provide clear and conspicuous statements to customers about the rates they will be paying, including circumstances under which the rate may change,” Attorney General Jepsen said.  “Failure to do so may be a violation of the Connecticut Unfair Trade Practices Act. In this case, the electric supplier may have made deceptive marketing claims that their prices were comparable to their competitors and to prevailing market rates. Customers thought they were getting a competitive rate, but were later surprised to find that, in some instances, they were actually paying as much as twice the market rate.”

“Connecticut consumers deserve protection from the types of predatory sales tactics that they have reported about Energy Plus to the Attorney General’s Office,” Consumer Counsel Katz added.  “Should the PURA investigation confirm these reports, swift action and meaningful penalties should follow. The need for consumers to receive full and fair disclosure of terms is fundamental.  We thank the numerous Connecticut residents that have come forward to register complaints, as their actions may well save money and avoid aggravation for many others.”

The petition asks PURA to open a proceeding to investigate these claims and, if appropriate, to consider the imposition of fines as well as the termination of Energy Plus’ license as an electric supplier. Additionally, the Attorney General and Consumer Counsel have asked PURA to consider new regulations requiring electric utilities to disclose the standard service rate and the relative savings or additional costs incurred by enrolling with a competitive supplier in a prominent location on customers’ bills.

Multiple consumer complaints made to the Office of the Attorney General against Energy Plus may suggest an elaborate effort on the part of the electric supplier to deceive potential customers into enrolling.

In its solicitations, Energy Plus offers rewards programs that could lead reasonable consumers to conclude that they would receive benefits in addition to competitive electricity prices, thereby saving them money. In fact, customers who sign with Energy Plus could end up paying rates that are far higher than those charged by other electric suppliers or the standard service rate.

Energy Plus offers an initial one-month “promotional rate” in Connecticut, which is slightly higher than the standard service rates from both Connecticut  Light and Power and United Illuminating. After one month, the promotional rate converts to a “monthly variable price” – described in consumer complaints as generally much higher, sometimes double, the standard service rate or the prevailing competitive market rates.

Some consumer complaints also detail the company’s apparent refusal to disclose to potential customers the variable rate the company was currently charging, making it impossible for customers to protect themselves before they enrolled and became obligated to pay Energy Plus’ rate.

Assistant Attorneys General John S. Wright and Michael C. Wertheimer, with Associate Attorney General Joseph Rubin, are assisting the Attorney General with this matter.