Pennsylvania PUC Hammers IDT Energy with $6.75 Million in Refunds and Penalties

The Pennsylvania Public Utility Commission (PUC) tentatively approved a settlement (Docket No. C-2014-2427657) on June 30 under which IDT Energy (IDT), a competitive electric and gas supplier, has agreed to pay more than $6.75 million in customer refunds and penalties.

In addition, IDT will modify its marketing and business practices, as a result of alleged  deceptive actions that triggered thousands of consumer complaints during the Polar Vortex winter of 2013-2014.

The commission voted 5-0 to approve the settlement, resolving a formal complaint against IDT that was filed on June 20, 2014, by the Pennsylvania Office of Consumer Advocate (OCA) and the Office of the Attorney General (OAG).

The complaint alleged that IDT misled customers with deceptive promises of savings; engaged in “slamming,” or the unauthorized enrollment of a customer; mishandled customer complaints; failed to provide accurate pricing information; charged different prices than listed in customer disclosure statements; and failed to comply with Pennsylvania’s Telemarketer Registration Act.

Under the terms of the settlement, IDT is required to take the following actions:

• Pay a total of $6,577,000 in refunds, which will be disbursed to IDT customers who were on variable rate plans and were billed for usage in January, February, or March 2014.
• Contribute $75,000 to “Hardship Funds” operated by electric distribution companies.
• Pay a $25,000 civil penalty to the Pennsylvania General Fund, and be prohibited from claiming a tax deduction for that amount.
• Pay the first $75,000 in costs for a third-party administrator to oversee the distribution of consumer refunds.
• Make numerous modifications to its business practices related to product offerings and advertising, disclosure statements, third-party verifications, training, compliance monitoring, reporting and customer service.
• Refrain from offering variable rate electricity products for a period of 21 months.

The Commission’s Order notes that the OCA and the OAG will determine refund amounts for consumers impacted by this case, based on their individual usage, the price charged, and refund amounts that may already have been received directly from IDT