The Illinois Commerce Commission has posted its show cause order against Major Energy, noted by RetailEnergyX.com yesterday, and now the specific allegations against Major are know.

In brief, a Staff reported alleged potential violations by Major as including (1) misrepresentation/deceptive sales script language; (2) exploitation of language barriers; (3) non-disclosure of requisite door-to-door solicitation uniform disclosure statements; (4) failure to adhere to requisite minimum contract terms and conditions; and (5) training of RES agents.

Major Energy previously provided RetailEnergyX.com with the following statement regarding the ICC's action:

"We don’t comment on specific cases or customer accounts or any pending or ongoing investigations, but we maintain that any increase in rates our customers have experienced were a result of the volatile energy market and a direct result of real market costs. We have and continue to constantly reach out to our customers regarding fixed rates and price protection plans but ultimately the customer makes the decision. We will fully cooperate in any investigation and look forward to being completely vindicated in this matter."

Among other things, Staff alleged:

"According to Major Energy’s door to door sales scripts, Attachment A to this Staff Report, the sales agents introduce themselves to potential customers as 'energy consultants,' rather than energy sales agents. Scripting describes the purpose of the visit by stating, 'We’re just doing a routine follow up on the info that was sent . . .' Attachment A. This language obscures the sales purpose of the visit and the identity of the company. When asked by Staff what information this language in the script is referencing, Major Energy admitted that it had sent no such information, and that the purpose was to reference the general information sent by the utility to describe the customer choice program. The net impression given is that the customer is being visited by a consultant hired by or otherwise affiliated with the utility to talk to them about the program, not to sell supply for a competitive company."

Staff further alleged:

"The sales script provided by Major Energy further state that the purpose of the visit is to 'see if you are getting maximum savings on your energy bills,' again obscuring the true purpose of the visit, while also implying that the salesperson will provide maximum savings. Attachment A. The script continues in this vein by promising to save the potential customer 'up to 10% based on historical savings.' Id. Major Energy’s script makes no effort to inform the prospective customer that the rate is variable, and could provide either savings or higher costs to customers, depending on the variation of the rate. The script further makes no effort to reference what rate the promised savings are to be measured against. Is it the utility default rate? Is it a municipal aggregation rate, or another supplier rate? The script simply mentions 'savings' multiple times, and at one point further mischaracterizes the visit as checking 'to see if your household is eligible for a possible reduction in costs.' Given that the customers were then billed rates by Major Energy that were in excess of the utility default rate, the multiple reference to savings and possible reduction in costs is deceptive, and appears to violate Part 412.110 (d) of the Commissions Rules and Section 2 of the Consumer Fraud and Deceptive Business Practices Act."

Staff also alleged:

"Moreover, Major Energy’s sales script indicates sales representatives further misrepresented the service provided, saying 'this is all part of State [d]eregulation and means that there are certain savings you may be missing on your electric/gas bill.' Attachment A. The sales script suggests that the customer is currently losing money by not enrolling with the program that the agent is offering by stating that the utility 'monopoly could charge whatever they want so you may have paid more.'"

Regarding verbal disclosures required during door-to-door visits, Staff alleged, "Based on Major Energy’s scripted sales presentation and complaints filed with the Consumer Services Division, the following requirements may not have been met: (1) an adequate explanation of the variable rate that would be applied under the contract; (2) disclosure of the term of the contract; (3) proper disclosure of the right to rescission ; (4) disclosure of early termination fees; (5) statement that Major Energy is an independent seller of power and energy service certified by the Commission and that the agent is not representing or acting on behalf of a government body, or consumer group; (6) statement that the customer will receive written notification from the electric utility confirming the switch to Major Energy for power and energy supply; and (8) [sic] statement in plain language describing the conditions that must be present for the savings to occur when an implied guarantee of savings was made."

According to the ICC's show cause order, "The Staff Report provides evidentiary support for Staff’s allegation that Major is not operating in a manner consistent with the public interest and applicable laws, rules and regulations. Consequently, Staff questions whether Major should continue to be designated as an ARES by the Commission."

The ICC directed Major Energy to show cause why the Commission should not:

(A) alter, modify, revoke or suspend Major Energy Electric Services LLC’s certificate of service authority for violations of the Public Utilities Act pursuant to Section 16-115B(b)(3);

(B) revoke Major Energy Electric Services LLC’s designation as an Alternative Retail Electric Supplier;

(C) require Major Energy Electric Services LLC to reimburse customers pursuant to Section 16-115B(b)(1); and/or

(D) issue a cease and desist order, require Major Energy Electric Services LLC to pay a fine of up to $10,000 per occurrence of a violation or non-conformance with the provisions of Section 16-115 or 16-115A, or up to $30,000 per day for violations or non-conformances which continue after the Commission issues a cease and desist order.

See more: ICC Staff Report