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Pennsylvania regulators seek to revoke energy retailer's license

Prosecutors for the Pennsylvania Public Utility Commission are seeking to revoke the license of electricity supplier Verde Energy USA Inc. for deceptive marketing and sales practices, including enrolling customers who were dead.

In a Jan. 30 complaint, prosecutors from the PUC's Bureau of Investigation and Enforcement alleged "egregious behavior" that includes roughly 9,000 violations of energy marketing and other utility regulations. Up to 339 customers were affected by deceptive telemarketing or door-to-door activities, according to the complaint, which seeks $8.8 million in civil penalties and refunds for certain customers. (Docket No. C-2020-3017229)

Verde Energy sells electricity and natural gas in six states and pitches itself as a supplier of 100% renewable energy at competitive rates. Its website says it has 250,000 residential and business customers. The Houston-headquartered company is a subsidiary of Censtar Energy Corp. of New York. Censtar is a subsidiary of Spark Energy Inc., a publicly traded retail electricity and natural gas supplier active in 19 states that is sponsored by NuDevco Partners LLC.

Kira Jordan, vice president of portfolio management and business insights for Spark Energy, said in an email Feb. 3 that Verde Energy does not comment on ongoing regulatory or legal matters.

"We do not condone misleading sales practices under any circumstances and are committed to providing green energy choices for Pennsylvanians in full compliance with all laws and regulations," Jordan said. "We look forward to working with the Bureau of Investigation and Enforcement to address these allegations."

The investigation was triggered in June 2019 when PPL Electric Utilities Corp., a regulated utility in Pennsylvania owned by PPL Corp., alerted regulators that Verde accessed about 4,000 customer accounts on PPL's website without the customers' knowledge or authorization, according to the complaint.

The alleged misleading and deceptive telemarketing and door-to-door sales activity included the unauthorized switching of customers' energy suppliers; threatening to disconnect customers' service; using private customer information to falsely report power outages or falsely submit requests to disconnect service; and "spoofing" phone numbers on telemarketing calls to falsely identify the call as coming from another utility or local number.

"Of grave concern, three ... of the unauthorized switches involved Verde enrolling a customer who was deceased," the complaint said.

Verde agents allegedly misrepresented themselves as employees of another company and used another company's logo on their clothing and on documents, the complaint said. Verde agents refused to leave after customers expressed no interest in Verde's services, refused to cancel enrollments after customer complaints about deceptive acts, and suggested that customers were required to switch or choose Verde, according to the complaint.

Verde must respond to the complaint by Feb. 20.