Public Utility Commission • Electric Generation Supplier • Overbilling Excessive Fine

HIKO Energy, LLC v. Pa. Pub. Util. Comm'n, PICS Case No. 17-0978 (Pa. Commw. June 8, 2017) Simpson, J. (89 pages).

PUC properly imposed a civil penalty on petitioner alternative energy supplier for its intentional overbilling of 5,000 customers for four months and properly calculated the penalty on a “per invoice” method because the penalty was not disproportionate due to the intentional conduct by petitioner's executives, petitioner did not mitigate and only made refunds to customers who complained and PUC properly applied the factors in determining the penalty. Affirmed.

In August 2013, petitioner offered customers a variable rate product that included a six-month introductory price guarantee that promised substantial savings for the first six monthly billing cycles. In January 2014, a sustained cold spell increased wholesale market prices for energy and petitioner had to pay exorbitant rates to purchase electricity. Petitioner's CEO made a business decision to intentionally overcharge 5,700 customers between January and April 2014. Petitioner voluntarily refunded $160,000 to some of its complaining customers. The PUC's I&E investigated customer complaints and in July 2014, filed a complaint alleging petitioner overcharged 5,700 customers on 14,600 invoices. I&E asserted that each invoice constituted a violation of 52 Pa. Code §54.4(a), requested a civil penalty of $1,000 per invoice, asked for the revocation of petitioner's authority to operate and ordered refunds for each customer. The commonwealth also filed a complaint against petitioner with the PUC alleging misleading marketing and improper billing. That case settled with petitioner required to establish a refund pool for customers. The ALJ in the I&E action denied the requests to revoke the EGS license and for refunds in light of the settlement in the commonwealth's PUC case and ordered a civil penalty of $1.8 million calculated by multiplying the number of violations, 14,600 invoices, by the approximate average overcharge per invoice. Petitioner appealed.