Download To the Application of ENERGY AMERICA, LLC, for approval to offer

Attachment No. 5
To the Application of ENERGY AMERICA, LLC, for approval to offer, render, furnish, or
supply natural gas or natural gas supply services as a natural gas supplier/marketer of
natural gas to the public in the State of Maryland.
ACTIONS AGAINST LICENSES: Provide the following information for the Applicant and any
Affiliate that engages in the sale at retail of electricity or natural gas.
Actions such as Suspensions/Revocations/Limitations/Reprimands/Fines or other similar actions
have been taken against the Applicant or unregulated affiliate(s), and are described in the
attached statement, including docket numbers, offense dates, and case numbers, if applicable.
The license number, state of issuance, and name of licensee are identified below:
Michigan/Ohio/Georgia:
During the Spring of 1999, regulatory agencies in Michigan, Ohio and Georgia inquired about
complaints received by them from consumers who had been solicited by Applicant in connection
with its retail marketing programs in those states. The complaints principally involved allegations
of inappropriate sales practices by certain independent sales agents and confusion arising from
some of Applicant’s marketing materials. In all cases, the Applicant pledged to continue its
practices of promptly investigating all consumer complaints and inquiries and, when necessary,
taking appropriate remedial action, including releasing customers from their contracts to purchase
gas from the Applicant and terminating the services of sales agents found to have engaged in
inappropriate sales practices. In Georgia and Ohio, where the Applicant’s marketing materials
were previewed by the regulatory agencies prior to their use, the Applicant agreed to make certain
further modifications to those materials, and volunteered the use of a “New Customer
Acknowledgement” form, which is a series of questions reviewed at a customer’s door by the
sales agent and which is designed to ensure that the customer understands the purpose of the
home solicitation. Also, in Georgia, the Applicant contributed forty thousand dollars to a fund used
by the Office of Consumer Affairs for various consumer protection issues related to gas
deregulation. In no case has the Applicant admitted to a violation of any laws or regulations.
On May 30, 2000, the Applicant signed a Stipulation with the Georgia Public Service Commission
(“GPSC”) Staff to resolve all outstanding claims by the GPSC and its Staff related to Applicant’s
marketing program in Georgia. The Stipulation (Docket No. 11126-U) was approved by the
GPSC in July. The Stipulation, as adopted, provides among other things that the Applicant will
establish an energy fund in the amount of $75,000 to assist low income and elderly customers to
pay gas bills during peak season; will pay the GPSC $25,000 for its costs and expenses incurred
in connection with the matter; will reimburse 25 customers for payments they made to the
Applicant for gas service; will continue its practices of using a third party verification system to
confirm customer contracts and a three-way real time communication process among the
Applicant, the GPSC Staff and customers, and will submit the third party verifier’s script to the
Staff for review and approval; will dedicate a customer service specialist to assist the GPSC Staff
on all issues; and, for a limited time, will notify the Staff of the areas in which the Applicant will
market. The Stipulation also includes an expedited hearing process to review customer
complaints that have not been verified during the 90 day period after the Stipulation is approved,
and an interpretation of the Federal Trade Commission’s three-day cooling off rule that
harmonizes the FTC rule with Georgia’s rules for consumers’ rights to change marketers, and
obliges the Applicant to comply with the GPSC’s interpretation of the FTC rule. (See copy of the
Order Adopting Stipulation With Modification attached).
New Jersey:
In the Matter of Alleged Violations of Law and Administrative Code By Energy America,
L.L.C., et al., BPU Docket No. ES99110852U and DCA Docket No. ENG 99-001
License Number: PESL-0033
In December 1999, the New Jersey Board of Public Utilities (“BPU”) and the New Jersey
Division of Consumer Affairs (“DCA”) jointly filed an action against Energy America, L.L.C.
(“Energy America”) by way of Order to Show Cause and Verified Complaint before the
BPU that centered on the company’s sales practices and marketing materials from
September 1999 through December 1999. BPU Docket No. ES99110852U, DCA Docket
No. ENG 99-001 . After a preliminary hearing, Energy America entered into an Interim
Administrative Consent Order whereby the company agreed to, among other things,
voluntarily suspend its business in the State in order to address the concerns of the BPU
and the DCA. (See copy of the Interim Administrative Consent Order attached).
Thereafter, Energy America worked diligently to cooperate with the BPU and DCA staffs
and counsel to revise its marketing materials and sales agent training program. In
January, 2000 the parties entered into a Final Administrative Consent Order. (See copy
of Final Administrative Consent Order attached). The New Jersey regulators made no
findings and never suspended, revoked or otherwise limited Energy America’s license to
operate in the State.