North American Power LLC, an electric supplier that has been accused of using deceptive marketing tactics, will pay $2.6 million to the nonprofit Operation Fuel under a settlement agreement filed with state utility regulators.
State Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz announced the agreement was filed with the Public Utilities Regulatory Authority (PURA) last week. If ultimately approved by PURA, the settlement would resolve a two-year state investigation into North American Power’s marketing practices.
The agreement settles allegations the company offered customers a low introductory rate that was soon replaced by a variable rate “substantially higher than market or standard service rates,” according to Jepsen.
Norwalk-based North American Power is one of the many companies that sell electricity to Connecticut consumers as part of the state’s competitive marketplace. Giving consumers the option of choosing their supplier is intended to allow them to shop around for better prices.
“We are satisfied that after an exhaustive two-year investigation, the dispute has been resolved with no finding of wrongdoing in the settlement agreement,” North American Power officials said in a statement. “We’re pleased to help support a terrific assistance program like Operation Fuel, and remain fully focused on providing our customers with stable rates and innovative products in order to help them make sensible energy choices.”
Under the agreement, the company will make $2.6 million in charitable donations to Operation Fuel, in equal payments of $100,000 a month over 26 months. The payments would begin within 30 days of PURA’s approval of the settlement and the closing of the investigation, according to Jepsen.
Operation Fuel is a statewide emergency energy assistance program for families in need. According to Jepsen, in 2013 and 2014, the nonprofit helped more than 17,000 individuals, including more than 6,700 children, and provided support to more than 1,600 seniors in the state.
Operation Fuel is funded by donations from corporations, foundations, and individuals as well as state grants. Most of the funds are distributed as fuel assistance to those in need.
The deal will have a “significant impact” on allowing the nonprofit to help an additional 5,000 households, according to Operation Fuel Director Pat Wrice.
“This settlement will bring to a close this long-running investigation while providing welcome support to Operation Fuel over the next two years,” Jepsen said in a statement. “While we are agreeing to disagree with the company regarding any finding of fault in its past behavior, we do agree that bringing this matter to a close at this time is in the public interest.”
North American Power is subject to “significant new laws” governing electric suppliers doing business in Connecticut, which have been enacted in recent years, Jepsen said.
Legislation in the past two years has reformed the electric supplier market, he said, putting new regulations on marketing and sales practices in place. The changes were spurred by a large number of complaints by consumers, he said.
Katz said the Office of Consumer Counsel continues believe variable electric rates can mislead consumers into paying more than necessary for electricity.
“I am grateful that through this settlement we are able to provide a substantial contribution to Operation Fuel, a vital resource for so many people in Connecticut, and I thank the company for working with us to achieve that,” Katz said in a statement.