Texas retail electric provider to pay $750,000 penalty to settle complaints

Thursday, Feb. 2, 2004 — The Public Utility Commission (PUC) on Thursday ordered Republic Power, LP, doing business as Energy America, to pay a $750,000 penalty. The company now operates in Texas under the name Direct Energy.

“Texas electric customers need straight-forward information given in compliance when choosing a provider,” said PUC Chairman Paul Hudson. “Our primary goal is not to levy penalties but to ensure customers are treated fairly as the retail electric market grows.”

In a far-ranging investigation, the PUC reviewed customer complaints regarding the company’s sales practices, including telemarketing, door-to-door sales and Internet offers. The investigation also covered the company’s print, broadcast and billboard advertising.

“The PUC will continue to investigate complaints that providers can not resolve with customers,” said PUC Commissioner Julie Parsley. “Texans deserve a high level of protection under electric competition.”

In a Notice of Violation issued in August 2003, the PUC charged Energy America with not providing the required “Electricity Facts Label” to new customers in addition to not making required disclosures. The PUC also alleged Energy America did not follow required procedures for new customers to acknowledge their agreement to the terms of service.

In addition to the penalty, Energy America has agreed to:

* Correct negative credit reports against customers who have filed slamming complaints with the PUC against the company. Slamming occurs when a customer is switched to another provider without authorization.

* Stop collection actions against customers who have filed complaints.

* Refund any termination fees to customers who filed complaints with the PUC.

* Notify all customers who have filed slamming complaints that they can terminate their contract with the company without a termination fee.

* Allow the PUC to review advertising materials before public distribution.

The penalty covers alleged violations and customer complaints up to Aug. 31, 2003. Energy America has 30 days to pay the $750,000 penalty once the order is signed.

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