Palmco Power has agreed to pay $5 million and not reapply for an electric supplier license until at least 2020 to settle allegations that its marketing practices violated state law.
The Public Utilities Regulatory Authority’s final decision Wednesday settles a more than two-year review that began when it suspended Palmco’s license in April 2015. That suspension was the result of complaints about door-to-door and telemarketing tactics described by the state as “deceptive, misleading and coercive.”
Some sales agents told prospective customers they were calling on behalf of the state or were in some way affiliated with the state, while others guaranteed customer savings, according to PURA.
The five-year ban is retroactive to the license suspension, so the New York-based company will be allowed to reapply for a supplier license in 2020, according to PURA’s final decision.
Palmco said in a statement that it is “fully committed to addressing customer concerns in Connecticut, and everywhere we do business.”
“Over the past year, the company has made several changes to its operations. We have hired senior managers with extensive retail energy experience, and have focused on a number of cultural and operational improvements, including but not limited to, enhanced sales monitoring and oversight mechanisms, as well as new policies and procedures. PALMco has completed a third party compliance audit, and will use these results to identify further improvements in our training, compliance and marketing functions and to developing some of the best practices in the industry.”
Palmco agreed to pay $5.3 million to New Jersey earlier this year for similar reasons and is also being sued in Illinois.
Since 2014, the legislature has passed several laws tightening disclosure requirements about contract terms and a ban on variable rate contracts for residential suppliers.
Palmco served more than 50,000 Connecticut customers between 2011 and April 2015. Many of those customer were enrolled through door-to-door sales or telemarketing.
Third-party electric suppliers were created through deregulation in the late 1990s. There are dozens of suppliers operating in Connecticut, and they market themselves as a way to save money compared to electric utilities’ standard offer rates.
The companies had 45 percent of the Connecticut market in 2012, but have since seen their market share dwindle.
