Pennsylvania seeks nearly $9 million fine against Verde Energy for ‘slamming’ customers and ‘egregious’ marketing violations

Pennsylvania utility investigators on Friday proposed an $8.8 million fine against a Texas-based energy supplier, Verde Energy USA, for allegedly committing a wide range of “egregious” marketing violations, including switching customers’ energy supply without their consent and threatening to shut them off.

The Public Utility Commission’s Bureau of Investigation and Enforcement filed a formal complaint against Verde, which seeks the fine, a revocation of the company’s license, and restitution to customers for improper charges.

The complaint alleges nearly 9,000 violations of energy marketing regulations or other sections of the public utility code, including 339 customer accounts affected by deceptive telemarketing or door-to-door activities and 3,922 incidents where Verde representatives allegedly used confidential customer information to access or create an account without the customers’ authorization.

Verde, which markets itself as a renewable power supplier, has 20 days to file an answer with the PUC.

A Verde spokeswoman declined to 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,” the company said in an email. “We look forward to working with the Bureau of Investigation and Enforcement to address these allegations.”

Formal complaints are adjudicated by an administrative law judge before the PUC makes a final ruling. Usually, complaints are settled by parties rather than going to a full trial.

The Public Utility Commission of Ohio announced in April that Verde was one of two companies under investigation for alleged marketing violations.

The Pennsylvania complaint against Verde reads like an encyclopedia of aggressively bad behavior by a supplier in the state’s competitive power markets, where customers can choose to switch to third-party suppliers from their standard utility supply. About two-thirds of residential customers have chosen to remain supplied by their local utilities.

According to the complaint, Verde switched customers’ energy suppliers without their consent, a practice called slamming. It enrolled three customers who were dead. Agents misrepresented themselves as employees of a utility, and telemarketers spoofed phone numbers to falsely identified themselves as utility representatives.

The complaint alleges that Verde representatives refused to leave after customers expressed no interest in the service, refused to cancel enrollments after customers complained, provided misleading information about the customers’ contracts with their current electric generation suppliers, and misrepresented Verde as a discount supplier.

The state launched its investigation in September after representatives of PPL Electric Utilities in Allentown reported a large number of complaints against Verde.

While all of the complaints cited in the PUC’s action were from customers of PPL, a number of Peco Energy customers in Delaware County recently reported similar experiences in a series of posts on Nextdoor.com, a neighborhood bulletin board.

Joyce Romoff of Wallingford said she learned her Peco electricity and gas accounts had been switched to Verde when she received a confirmation letter from Peco. She said she had no contact with a Verde represtative.

“I felt like a victim of identity theft,” she said. She notified Peco that she did not want to switch service.

The proposed $8.8 million fine against Verde — roughly $1,000 per alleged violation — is among the highest penalties sought by the PUC against an electric supplier.

Nils Hagen-Frederiksen, the PUC’s press secretary, suggested that consumers should file an informal complaint with the agency about any alleged improper behavior by a regulated company. “If a customer has experienced something like unauthorized switching, we want to hear about it,” he said.

The PUC can be reached at www.puc.pa.gov org or 1-800-692-7380.