In a decision issued earlier this week, the Public Utilities Regulatory Authority (PURA) fined a gas and power company $1 million for failing to comply with its orders, revoked its license, and ordered the company to pay restitution to more than 1,000 customers. Of the $1 million penalty, $950,000 will go to Operation Fuel, which provides emergency assistance to Connecticut residents struggling to pay energy and utility bills. The remaining $50,000 will go to the state of Connecticut, according to the decision.
According to PURA, Sunwave Gas & Power – which was originally issued an electric supplier license in 2014 to serve residents, as well as commercial and industrial customers in Connecticut – ignored a May order to pay restitution to its customers within a 20-day time period.
According to the decision, Sunwave Gas & Power had been suspended by the Independent System Operator of New England Inc. (ISO-NE), a nonprofit that operates the regional bulk power generation and transmission system and administers New England’s wholesale electricity marketplace.
According to documents submitted with this case, Sunwave Connecticut said it notified its customers in February that they would be returned to default service, meaning either UI or Eversource picked them up at that time.
In a May 26 letter drafted by the Robinson and Cole law firm, which is representing Sunwave, the company responded that the first violation notice contained “factual and legal inaccuracies and reaches incorrect conclusions about Sunwave Connecticut’s actions and operations.”
The letter further says that “While Sunwave Connecticut is not currently serving retail electric supply customers, Sunwave Connecticut maintains an active corporate registration with the Connecticut Secretary of [the] State, and personnel in Sunwave Connecticut’s corporate office manage Sunwave Gas & Power Connecticut’s day-to-day operations.”
Sunwave also took issue with PURA’s reference to the company’s “purported” suspension by the ISO-NE. The violation, according to Sunwave’s response letter, mentioned ISO-NE’s suspension of Sunwave USA Holdings, Inc., not Sunwave Connecticut. In addition, Sunwave argues that a supplier has to notify PURA only if ISO-NE issues a termination proceeding.
Sunwave Connecticut notified its customers in February that they would be returned to default service, 13 days before Sunwave USA Holding Inc.’s January suspension from the ISO-NE, according to the response letter.
On June 30, according to the decision, PURA’s Office of Education, Outreach, and Enforcement (EOE), which had completed the investigation earlier in the year that led to the first violation and restitution order, contacted PURA’s leadership to let them know that Sunwave had not complied with its May orders. This led PURA to issue a second violation, revoking the company’s license and assessing a civil penalty of $1 million.
In August, PURA held a hearing during which Sunwave presented testimony and exhibits in response to the allegations. Sunwave had not submitted payments or a list of customers to whom to apply those payments within the 20-day time period stipulated by the Authority in May. Sunwave was supposed to pay restitution to more than 1,000 customers, according to the analysis in the decision.
Sunwave admitted it did not comply because it did not have the money to do so. “Each electrical supplier must demonstrate to the Authority’s satisfaction that it has ‘technical, managerial and financial capability to provide electric generation services,’” according to PURA’s Sept. 7 decision.
Sunwave did not appeal or challenge that finding, but also noted it did not have any customers, revenue, or cash to pay the penalty or the restitution.
In a letter drafted Sept. 1, Sunwave’s attorneys say the amount of the fine is “overwhelming,” and that the Authority should take into consideration the appropriateness of the action versus the size of the business.
“PURA is required to consider ‘other factors deemed appropriate and material to the particular circumstances of the violation.’ The Company does not have the ability to pay the restitution or penalties set forth in the violation,” according to the letter.
However, in its decision issued this week, PURA maintains that Sunwave acted in a way that directly impacted its customers economically.
“That Sunwave has so mismanaged its finances to be unable to provide restitution is no salve to these customers and no basis for tempering sanctions,” the decision states. “Notably, Sunwave did not raise the issue of its financial condition when first ordered to pay restitution. Equally important, Sunwave failed to provide any evidence, such as financial statements or other documents, demonstrating its dire financial condition, and the Company has not filed for bankruptcy protection or indicated that it would do so.”
The restitution, according to the decision, will be as follows:
“Sunwave is required to reimburse customers that the EDCs – electric distribution companies – returned to standard service who were being served by Sunwave on contracts with rates lower than the current standard service rate in the applicable service territory an amount equal to $20 per month for the remainder of the contract term for residential customers, and $40 per month for the remainder of the contract term for nonresidential customers, by providing to the EDCs for validation the list of the customers to be reimbursed and a payment to each EDC of the total amount of the reimbursement owed by Sunwave to the customers served by the EDC. Such reimbursement shall be made to the customers in the form of a bill credit coordinated with each EDC.”
Documentation and names of those Sunwave customers reimbursed, and the amounts paid to Eversource and UI for each customer will have to be submitted, according to the decision.
Sunwave could not be reached for comment today.
