Joint Complainants’ Replies ……………………………………. 46 Disposition – Exception No. 1 ………………………………….. 47 Mr. Sobiech’s Exception No.2 …………………….…………………… 51 Pa. G&E’s Replies ……….…………….……………..………… 52 Joint Complainants’ Replies ……………………..…………..…. 53 Disposition – Exception No. 2 …………….……….…………… 54 Mr. Sobiech’s Exception No.3 ……….………………………………… 56 Pa. G&E’s Replies.……………………………………………… 56 Joint Complainants’ Replies ……………………………………. 57 Disposition – Exception No. 3 ………………………………….. 58 Mr. Sobiech’s Exception No.4 ………………………………….……… 61 Pa. G&E’s Replies ……………...……………………….……… 62 Joint Complainants’ Replies …………………………....………. 63 Disposition – Exception No. 4………………………….……….. 63 Commission Settlement Guideline Factors……………………………... 64 CONCLUSION ….…………………..……….……………………………..… 64 ORDERING PARAGRAPHS…….……...………………..…………………... 65
the lawsuit, has vigorously defended the suit, and that a case management conference is scheduled; and 5) that he became aware of the proposed Settlement on March 26, 2015. Id. Mr. Sobiech also included with his Notice of Intervention a pleading styled, “Public Statement . . . and Request for Hearing” (Public Statement), in which he explained his position concerning the proposed Settlement. Mr. Sobiech is opposed to Commission approval of the Settlement. He takes the position that the Settlement is not in the best interests of the Company’s customers or the citizens of the Commonwealth. This position is based on the fact that, in Mr. Sobiech’s opinion, inter alia, the proposed Settlement exceeds the authority of the Commission. The objection of Mr. Sobiech is mostly grounded upon the fact that the Settlement includes a provision, discussed infra, that would require any participating customer to sign a general release, purporting to release Pa. G&E from all private causes of actions in a civil court of law that the customer may have against Pa. G&E, including claims for breach of contract, as a condition of receiving a refund from a refund pool that is to be established under the terms of the proposed Settlement. Mr. Sobiech states, “[f]or any customer of The Company to take advantage of the proposed settlement, said customer is required to execute a general release that would discharge The Company from any and all claims for liability regardless of whether the PUC has jurisdiction over said claims.” See Public Statement at 2. In the Public Statement Mr. Sobiech also expresses his opposition to the Settlement based on its alleged insufficiency. Mr. Sobiech relies on the fifth criterion of the Commission’s Factors and Standards for Evaluating Litigated and Settled Proceedings, 52 Pa. Code § 69.1201 (Commission Settlement Guidelines), and also references comments of I&E and the Company as taken from their Statements in Support of the Settlement, to assert that all of Pa. G&E’s customers may have been affected by the conduct alleged in the Complaint. Yet, the Statements in Support do not disclose how many customers were, in fact, “defrauded” by Pa. G&E. To Mr. Sobiech, the number of customers who were
We evaluate whether a proposed settlement satisfies the “public interest” standard by a preponderance of the evidence of benefits, and such burden can be met by showing a likelihood or probability of public benefits that need not be quantified or guaranteed. Popowsky v. Pa. PUC, 594 Pa. 583, 937 A.2d 1040 (2007) (Popowsky) (“substantial” public interest standard discussed in the context of a merger reviewed under Section 1103 of the Code, 66 Pa. C.S. § 1103). The pertinent inquiry of a reviewing court in the context of the analysis of the public interest of Section 1103 of the Code, supra, is stated as follows: In summary, as indicated in , the appropriate legal framework requires a reviewing court to determine whether substantial evidence supports the Commission's finding that a merger will affirmatively promote the service, accommodation, convenience, or safety of the public in some substantial way. In conducting the underlying inquiry, the Commission is not required to secure legally binding commitments or to quantify benefits where this may be impractical, burdensome, or impossible; rather, the PUC properly applies a preponderance of the evidence standard to make factually-based determinations (including predictive ones informed by expert judgment) concerning certification matters. Popowsky, 594 Pa. at 611, 937 A.2d at 1057. This Commission has historically defined the public interest as including ratepayers, shareholders, and the regulated community. See What is in the public interest is decided by examining the effect of the proposed Settlement on these “stakeholder” entities. Id. The public interest is best served, however, by ensuring that the underlying transaction complies with applicable law. See Dauphin County Indus. Dev. Auth. v. Pa. PUC, 2015 WL 5238841, 2015 Pa. Commw. LEXIS 381 (September 9, 2015) (Commonwealth Court Order reversing Commission approval of a joint settlement due to
The Settlement also provides for the establishment of a third-party administrator to manage and distribute the refunds from the Refund Pool. I.D. at 37. The first $100,000 of administrative costs and expenses of the Refund Pool’s administration will be paid by Pa. G&E. See Settlement ¶ 35. Thereafter, the costs of administration will come from the Refund Pool itself. Id. The Refund Pool administrator will use its best efforts to distribute the funds from the pool within 180 days of the Commission’s final order in this proceeding. The administrator will provide monthly reports to the OAG, the OCA, the Company and designated Commission staff, until all fund monies are distributed and the fund is exhausted and terminated. I.D. at 37-38. “Commission staff,” as used in the Settlement, was interpreted by the presiding ALJs to include, at a minimum, the Commission’s Bureau of Consumer Services (BCS) and the Office of Administrative Law Judge, which are the two offices that handle informal and formal consumer complaints. It was recommended that these offices should be made aware of the distributions from the Refund Pool. I.D. at 38. Any funds remaining in the Refund Pool after all disbursements are issued to eligible consumers will be divided and distributed to the appropriate EDCs’ hardship fund on a pro rata basis. The distribution to the appropriate hardship fund will be made pursuant to an allocation that is to be determined based on the ratio of the Company’s customers in the EDC’s territory to the total amount of customers of the Company in Pennsylvania as of January 1, 2014. I.D. at 38. Any unclaimed funds in the Refund Pool will be forwarded to the Pennsylvania Department of the Treasury for disposition pursuant to the unclaimed property procedures for those customers who are entitled to a refund. The Settlement also requires that the Company honor all commitments to customers enrolled in the Company’s rebate programs and additionally provides that customers can contact Pa. G&E directly with any requests for a refund. Id. This Commission finds it significant to observe, at this juncture, that an affected customer will have other options to pursue a refund in addition to the Refund Pool
I.D. at 8-14. ALJs’ Recommendation – Refund Pool ALJs Cheskis and Barnes concluded that the provisions in the Settlement which addressed the creation and administration of a Refund Pool were in the public interest. See I.D. at 37-43. After a thorough discussion of recent Commission proceedings involving formal complaints against EGS companies, the ALJs concluded that the Refund Pool and its process to give financial relief to consumers who voluntarily agree to participate, was in the public interest and consistent with the Commission’s IDT Order, the Commission’s Order in Pa. PUC, Bureau of I&E v. Energy Services Providers, Inc. d/b/a Pa. Gas and Electric and U.S. Gas and Electric d/b/a Pa. Gas and Electric, Docket No. (Order entered October 2, 2014) (October 2014 Order), as well as other Commission precedent. I.D. at 41. The ALJs duly acknowledged the concerns raised by Mr. Sobiech regarding the signing of a general release as a condition of obtaining payment from the Refund Pool. The ALJs rejected the objections and position of Mr. Sobiech that the inclusion of the provision (Paragraph # 43 of the Settlement), regarding the signing of a general release was an impediment to Commission approval of the Settlement without modification. The pertinent reasoning of the ALJs concerning the Refund Pool, its operation, and the primary objections of Mr. Sobiech, is reprinted below: With regard to Mr. Sobiech’ s contention that it is not in the public interest to require the harmed customers of PaG&E to sign releases in order to receive a refund under this Settlement agreement, we disagree. If a customer is an active plaintiff in a separate proceeding (i.e. averring breach of contract) against PaG&E, he or she has the choice of 1) receiving the refund amount offered to him/her as determined by the third party Administrator of the Refund pool in the
I.D. at 41-43. ALJs’ Recommendation – Civil Penalty On consideration of those provisions of the Settlement providing for the imposition of a civil penalty and Pa. G&E making a concomitant contribution to the hardship fund, the presiding ALJs also concluded that this condition of the Settlement was in the public interest and should be approved without modification. I.D. at 44. The presiding ALJs reviewed recent Commission decisions concerning civil penalties involving EGS companies and concluded that the Settlement amount in the instant proceeding was consistent with prior Commission decisions approving civil penalties on EGS companies for similar violations of the Code and Commission Regulations. The ALJs reasoned, in pertinent part: In particular, we note that, in the October, 2014 Order, the Commission found that a civil penalty of $1,000 for the 108 accounts physically switched to PaG&E without customer consent, for a total of $108,000 was appropriate. This amount was similar to the Commission’s decision in cases involving slamming intentional in nature where $1,000 civil penalties per account switched were imposed. Pa. Pub. Util. Comm’n v. I Energy Inc., Docket No. M-00021618 (April 18, 2000); Pa. Pub. Util Comm’n, Law Bureau Prosecutory Staff v. Mxenergy Electric, Inc., Docket No. M-2012-2201861 (August 29, 2013); Pa. Pub. Util Comm’n, Bureau of Investigation and Enforcement v. Public Power, LLC Docket No. (December 19, 2013) (penalties less than $1,000 per account were levied for accounts not yet physically switched, but in the process). Similarly, in Pa. Pub. Util. Comm’n Bureau of Investigation and Enforcement v. IDT Energy, Inc.,
acceptable means for an EGS to resolve a dispute arising under the Code or Commission Regulations. Id. at n.1. Joint Complainants’ Replies The Joint Complainants respond that in the IDT Order and also in similar proceedings involving EGS companies, the Commission has approved the issuance of refunds that an EGS agreed to as part of a settlement to resolve a complaint. OAG/OCA R.Exc. at 6-7, citing IDT Order, Public Power, Pa. PUC, Bureau of Investigation & Enforcement v. Pa. Gas & Electric, Docket No. M-2013-2325122 (Order entered October 2, 2014) (Pa. G&E – Gas). Thus, they argue that Mr. Sobiech fails to distinguish this settled proceeding from a fully litigated one. OAG/OCA R.Exc. at 7. The Joint Complaints additionally assert that Mr. Sobiech mischaracterizes the nature of the Complaint filed against Pa. G&E as a “rate” dispute, in his reliance on Delmarva. OAG/OCA R.Exc. at 7. They explain that the Complaint encompassed allegations, inter alia, of specific violations of the Commission’s Chapter 54 Regulations, 52 Pa. Code § 54.1-54.204. Id. Regarding the allegations of Mr. Sobiech that Section 501 of the Code, 66 Pa. C.S. § 501, does not provide the Commission with the requisite authority to approve the Joint Petition and Settlement, the Joint Complainants extensively quote from the IDT Order to highlight the Commission’s discussion of the applicability of this provision to disputes involving EGS companies. OAG/OCA R.Exc. at 8-9. Finally, in reply to the allegations that the presiding ALJs improperly applied statutory authority from the Consumer Protection Law to this proceeding, the Joint Complainants point out that the ALJs did not expressly rely on these provisions in concluding that refunds are proper. OAG/OCA R.Exc. at 10. Instead, argue the Joint
We expressly concluded that directing a billing adjustment for an EGS over bill of supply charges is within the Commission’s Section 501 powers to carry out the consumer protections in the Act that are applicable to competitive electricity generation supply service. See IDT Order at 17-18. As a billing adjustment is a potential remedy in a litigated setting, a voluntary refund of disputed EGS charges is also an outcome that can be accomplished in the context of a comprehensive settlement. Additionally, we agree with the positions of the Joint Complainants that the ALJs’ discussion of the Consumer Protection Law was not in express reliance on those statutory provisions, but necessary to place the issues before them in the proper context for purposes of reviewing the terms of the Settlement. See Kiback v. IDT Energy, Inc., supra, at 33, n. 10. Finally, we conclude that Mr. Sobiech’s reliance on Delmarva and Virgilli are injected out of context. See discussion of Exception No. 4, infra. Contrary to the position of Mr. Sobiech, the Virgilli court has expressly that courts have construed the Code as creating many areas of concurrent jurisdiction between the Commission and the Commonwealth’s courts. See Virgilli, citing, e.g., ; . Mr. Sobiech’s Exception No. 3: The Administrative Law Judges Erred in Approving the Settlement Without Knowing and Taking into Consideration How Many of the Company’s Customers Were Harmed by its Conduct and Without Knowing and Taking into Consideration the Extent of the Financial Harm Caused by the Company In Exception No. 3, Mr. Sobiech requests that the Commission reverse the Initial Decision and decline to approve the Settlement. This request is based on allegations that the Settlement resolves the formal complaints against Pa. G&E without knowing and taking into consideration how many customers were harmed by the Company’s conduct and without knowing and taking into consideration the extent of financial harm caused by the Company’s conduct. Exc. at 11. He cites the pertinent portion of the ALJs’ discussion of