involving expert testimony of Daniel Mumford for I&E, Dr. Charles J. Cicchetti for HIKO, as well as the testimony of Harvey Klein, CEO of the Company. Our Initial Decision in that case contains further detail explaining our reasoning in calculating the civil penalty. In summary, we found a civil penalty totaling $1,836,125 to be a sufficient deterrent to HIKO. With regard to the provision in the Settlement that the Company will make a total contribution of $25,000 to the EDCs’ Hardship Funds with the contribution allocated by the ratio of HIKO customers in the EDC’s territory to the total amount of HIKO customers in Pennsylvania as of January 1, 2014, we find this provision of the Settlement is also in the public interest and supports adopting the Settlement without modification. This is particularly true because of the strain placed on Hardship Funds and low-income consumers as a result of the increased bills consumers paid during the months at issue in this case. The Hardship Funds benefit all low-income consumers in the EDCs’ territories, not solely the customers of HIKO. As a result, we find the $25,000 contribution to EDCs’ Hardship Funds to be reasonable and a pragmatic compromise between the parties allowing them to more expeditiously implement the agreed upon remedial actions. 3. Injunctive Relief With regard to the third aspect of the Settlement, injunctive relief, we note that the parties’ settlement discusses modifications to business practices as equating to injunctive relief. This “injunctive relief” as described in the settlement appears to be “corrective actions” which HIKO agrees to going forward, i.e. changing the Company’s disclosure statement, marketing and sales activities. These are terms of settlement which we are approving as they are in the public interest. The Settlement provides extensive provisions requiring numerous modifications to HIKO’s business practices. The Settlement provides significant detail regarding changes to HIKO’s product offering, marketing practices, third party verifications, Disclosure Statement, training of internal and external sales representatives, compliance monitoring, reporting and customer service. These provisions address many of the issues raised in the Complaint. The parties agree HIKO will not accept any new variable rate customers in Pennsylvania until June 30, 2016.
As such, we find that the “injunctive relief” provisions contained in the Settlement agreement are in the public interest and support adopting the Settlement in its entirety without modification. 4. Application of the Policy Statement Factors The Commission has promulgated a Policy Statement at 52 Pa. Code § 69.1201 that sets forth ten factors (“Rosi Factors”) that the Commission will consider in evaluating litigated and settled proceedings and determining whether a fine for violating a Commission order, regulation or statute is appropriate, as well as whether a proposed settlement for violations is reasonable and approval of the settlement agreement is in the public interest. When applied in settled cases, the factors will not be applied in as strict a fashion as in a litigated proceeding. 52 Pa. Code §69.1201(b). The parties in settled cases will be afforded flexibility in reaching amicable resolutions so long as the settlement is in the public interest. Id. The Policy Statement notes that “these factors and standards will be utilized by the Commission in determining if a fine for violating a Commission order, regulation or statute is appropriate, as well as if a proposed settlement for a violation is reasonable and approval of the settlement agreement is in the public interest.” 52 Pa.Code § 69.1201(a). The factors in the Policy Statement are applied to both the Settlement in general and the civil penalty specifically. A review of the factors articulated in the Policy Statement, as applied to both the Settlement and the civil penalty, as well as the various positions of the parties with regard to each of the factors, supports finding that the Settlement should be adopted without modification as being in the public interest. With regard to the first Rosi Factor, we find the allegations are of a serious nature including that HIKO: 1) did not provide the savings or benefits promised to customers by its salespeople or welcome letters; 2) failed to provide rate information; 3) failed to provide pricing information in plain language in its Disclosure Statement; and 4) charged prices in early 2014 that did not conform to its Disclosure Statement. 52 Pa. Code § 69.1201(c)(1). The Commission held in Pennsylvania Public Utility Commission, Law Bureau Prosecutory Staff v. MXenergy Electric Inc., Docket No. M-2012-2201861, Order at 5 (May 3, 2012) as follows. “When conduct of a serious