Attorney General Kathleen G. Kane and Acting Consumer Advocate Tanya J. McCloskey Thursday announced a proposed settlement with a third electric generation supplier accused of deceptively marketing its variable electric rates to Pennsylvania consumers, many of whom filed complaints about spikes in their rates during the winter of 2014.
Under the settlement, IDT Energy, Inc. has agreed to pay $2.4 million in refunds to eligible consumers in addition to the $4.1 million the company has already paid. The company must also pay a civil penalty of $25,000 and make a contribution of $75,000 to the Electric Distribution Companies' hardship funds.
Combined with two earlier settlements with other electric generation suppliers, the additional amount of refunds for eligible consumers now stands in excess of $6 million.
The Office of Attorney General and the independent Office of Consumer Advocate last year jointly filed five legal actions against electric generation suppliers after receiving thousands of complaints from consumers. In some cases, consumers said their costs unexpectedly increased as much as 300 percent.
The settlement with IDT Energy follows two proposed settlements announced earlier this year with HIKO Energy, LLC and Energy Services Providers Inc., which does business as Pennsylvania Gas and Electric.
Under the terms of the proposed settlement with IDT Energy, consumers who were on variable rate plans in January, February or March of 2014 will be contacted directly by a third-party settlement administrator if they qualify for a refund.
The refunds will be based on consumers' usage and the price they were charged during that time period. Refunds already received will be a factor in any additional refunds.
The settlement also imposes a 21-month moratorium on the selling of variable rates by IDT Energy. The company must offer fixed-rate products for terms longer than six months during this time period.
Additionally, should the company begin to offer variable rate contracts after that time period, IDT Energy will be required, among other things, to disclose to consumers in plain language that prices may fluctuate monthly and that there is no limit to how high the price may go.
The proposed settlement with IDT Energy requires approval by the Administrative Law Judges and the Public Utility Commission. The settlements proposed with PaG&E and HIKO are still pending. The other two legal actions filed against Blue Pilot Energy, LLC and Respond Power, LLC remain in litigation.Consumers with questions about the IDT Energy settlement may contact the Bureau of Consumer Protection at 800-441-2555.