July 9, 2015

Under a settlement agreement filed with the state Public Utilities Regulatory Authority (PURA) today, electric supply company North American Power LLC will pay $2.6 million to the nonprofit Operation Fuel, Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz announced.

If approved by PURA, the settlement would resolve a two-year investigation into the company's marketing practices.  PURA opened this proceeding following a number of complaints that North American Power offered a low introductory rate that was quickly replaced by a variable rate that was substantially higher than market or standard service rates. The $2.6 million in charitable donations to Operation Fuel would be made in equal payments of $100,000 over 26 months, beginning within 30 days of PURA's approval of the settlement and closing of the investigatory proceedings.

"This settlement will bring to a close this long-running investigation while providing welcome support to Operation Fuel over the next two years," Attorney General Jepsen said. "While we are agreeing to disagree with the company regarding any finding of fault in its past behavior, we do agree that bringing this matter to a close at this time is in the public interest. Going forward, North American Power is subject to the significant new laws governing all electric suppliers that do business in the state of Connecticut that the legislature has enacted in the past couple of years."

"I'm pleased that we were able to resolve one of the many cases currently pending before PURA relating to allegations of unfair practices and pricing by competitive electric suppliers," Consumer Counsel Katz said. "This office continues to believe that variable rates can mislead residential consumers into paying more than necessary for energy, and I urge consumers to avoid them. I am grateful that through this settlement we are able to provide a substantial contribution to Operation Fuel, a vital resource for so many people in Connecticut, and I thank the company for working with us to achieve that."

"This settlement will have a significant impact on Operation Fuel’s ability to provide energy assistance to an additional 5,000 households," said Pat Wrice, director of Operation Fuel.

Operation Fuel is Connecticut's only statewide emergency energy assistance program, and it provides energy assistance to households in need. In 2013 and 2014, Operation Fuel provided assistance to more than 17,000 individuals, including over 6,700 children, and provided support to more than 1,600 seniors in Connecticut.

A nonprofit, Operation Fuel is funded by donations from corporations, foundations and individuals as well as grants from the state of Connecticut. The vast majority of funds donated to Operation Fuel are distributed in the form of fuel assistance to Connecticut residents in need in that same year.

Legislation passed in the past two years has made substantive reforms to the electric supplier market and has directed PURA to develop new regulations on marketing and sales practices, standard contract requirements and standard billing formats. The legislation was passed as a result of a large number of consumer complaints about the practices of various third-party electric suppliers.

Assistant Attorneys General John Wright and Michael Wertheimer assisted the Attorney General with this matter. Attorney Joseph Rosenthal assisted the Consumer Counsel with this matter.

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