July 17, 2015— Operation Fuel, a non-profit group that assists low-income households in Connecticut with their energy bills, will receive $2.6 million from North American Power if Connecticut regulators approve the terms of a settlement.
The utility company, based in Norwalk, has been under a two-year investigation by the Connecticut Public Utilities Regulatory Authority (PURA) over allegations that it has been employing deceptive marketing practices. Among the allegations addressed in the settlement is the claim that the company offered its customers low introductory rates, only to then quickly replace them with variable rates that were "substantially higher" than market or standard service rates. If the settlement is approved by the PURA, North American Power will pay Operation Fuel $2.6 million in equal payments of $100,000 over the following 26 months.
This is not the only case to be brought before PURA in recent years. The state of Connecticut encourages competitive marketing by its utility companies in hopes that the competition will give consumers the opportunity to shop around for the best prices. However, several complaints have been made against third-party utility providers in the past. These complaints led to legislation in May 2014 that was intended to provide clarity and certainty for electric customers when they select their energy supplier. As a result, PURA was put in charge of developing regulations on marketing and sales practices and creating standard billing formats.
Therefore, in addition to making payments to Operation Fuel, North American Power will now have to follow new rules that were put in place while it was still under investigation. One new regulation prohibits suppliers such as North American Power from raising rates for the first three billing cycles of a new contract. In addition, suppliers must notify residential customers in advance of certain rate changes, and they are prohibited from charging cancellation or early termination fees to residents who move within the state and do not change suppliers. For all other cancellation and early termination situations, utilities are only allowed to charge a maximum of $50.
Sources: Media Sources, State Website Press Release