The Pennsylvania PUC on February 8 issued an order in Docket M-2016-2546422 on a proposed settlement agreement between the Commission's Bureau of Investigation and Enforcement (I&E) and SFE Energy Pennsylvania, Inc. (SFE Energy or Company) (collectively, the Parties).
The Pennsylvania PUC in its February 8 order in Docket M-2016-2546422, in describing background of the matter, stated, "I&E was prepared to allege in a formal complaint that SFE Energy or an agent of the Company permitted a person to conduct door-to-door sales and marketing activities before it had obtained and reviewed a criminal history record from the Pennsylvania State Police and from every other state in which the person resided within the last twelve months."
Further background on the matter is provided below
The settlement between I&E and SFE Energy Pennsylvania, Inc. provided SFE Energy Pennsylvania, Inc. would pay a civil penalty of $1,000.
The PUC did not accept the proposed level for the civil penalty, and instead directed that the proposed civil penalty should be increased to $5,000. The PUC approved the settlement as modified by the higher civil penalty
SFE said in a statement to RetailEnergyX.com that it does not oppose the Commission’s approval of the settlement, as modified. A full statement concerning the matter from SFE Energy is below.
The Pennsylvania PUC stated in its February 8 order in Docket M-2016-2546422 that, "In summary, we deem the conduct at issue in this proceeding to be of a serious nature. Although we find that the Company's actions after discovering the problem – in cooperating with the investigation, re-training compliance staff and reviewing and verifying background checks – generally support approval of the Settlement terms, we believe the proposed civil penalty should be increased to $5,000."
The Pennsylvania PUC in its February 8 order in Docket M-2016-2546422 stated, "Here, we acknowledge that the incident appears to have been a one-time occurrence. Nonetheless, we are constrained to find that the event itself was a serious one with a potential for significant harm to a consumer, particularly in light of the allegations of criminal conduct including burglary and criminal trespass. The apparent isolated nature of the event does not diminish its seriousness for purposes of evaluating the imposition of a civil penalty. Upon review, we believe the application of the first factor would support a higher penalty."
The Pennsylvania PUC in its February 8 order in Docket M-2016-2546422 stated, "We agree that the Company's actions after learning of the incident were appropriate and help to reduce the likelihood of a similar incident in the future. Thus, we find that this factor does not warrant a higher penalty."
The Pennsylvania PUC in its February 8 order in Docket M-2016-2546422, in describing terms of the settlement, further stated, "The Settlement also acknowledges that the Company has taken or will implement corrective actions to its operating procedures which will act as safeguards against future unauthorized EGS marketing practices of employees or agents of SFE Energy. The Settlement further explains that SFE Energy terminated the employment of Mr. McDowell, disciplined the compliance staff member responsible for the incident, and reviewed and verified all criminal background checks for salespersons hired on or after April 15, 2016. Additionally, the Settlement acknowledges that SFE Energy implemented a process document that outlines the step-by-step process for performing background checks and retrained all of its compliance staff members. Settlement at 9-10."
The Pennsylvania PUC in its February 8 order in Docket M-2016-2546422 described the background of the matter as follows:
"The alleged incident involves the arrest of a door-to-door sales agent of SFE Energy following his uninvited entry into an individual's home. I&E averred that on May 10, 2016, an employee of PECO emailed the Commission's Bureau of Consumer Services with a link to a media story about an individual arrested in Glenolden, PA. The media story identified the individual as Antwan McDowell, who was charged with burglary, criminal trespass and drug possession, after a borough resident allegedly found him standing in her living room. According to the story, Mr. McDowell told the police 'he works for SFE Energy/PECO and was there to inquire about energy bills.' Investigation Letter at 1.
"I&E described the allegations of the confrontation between the resident and Mr. McDowell by quoting from the media story:
"According to the affidavit, the victim said she was in her computer room on the second floor when she heard her inner and outer entry doors close. She said she came down to the first floor to find the individual standing in her living room and looking around at her belongings. She yelled at him to leave before pushing him toward the front door, the affidavit states. The victim told police the man stated that he wanted to see her electric bill, and then exited the house.
* * *
"McDowell was taken into custody and searched. Located in his right jacket pocket was [a] small glassine baggie containing marijuana and a pack of Garcia Vega cigars commonly used to smoke marijuana, the affidavit states. He was also in possession of a spring loaded knife.
Investigation Letter at 1-2.
"SFE Energy hired Mr. McDowell as a door-to-door independent contractor to market on its behalf on April 15, 2016. The Parties assert that the Company conducted a criminal background check consistent with the Commission's Regulations but that the check uncovered no criminal history. The incident described in the media story occurred on May 5, 2016. Subsequent to Mr. McDowell's arrest, SFE Energy conducted a second criminal background check on May 10, 2016, which revealed a criminal history that would have prohibited Mr. McDowell from selling on behalf of SFE Energy. Settlement at 4.
"In response, SFE Energy conducted an internal investigation and concluded that there was a data entry error when performing the background check which resulted in no previous criminal history activity being reported. The Company's internal investigation determined that a compliance staff member for SFE Energy erroneously entered the certification date as the salesperson's date of birth into the third-party vendor background check database. Id. at 4.
"SFE Energy provided answers to I&E's data requests about the Company's procedures and the incident. SFE Energy confirmed that it maintains procedures for selecting and training third party sales agents. The Company also explained that its compliance policy includes a requirement that its internal compliance staff must conduct criminal background checks on all sales agents, including sexual offender background checks, before qualifying and deploying its agents to perform door-to-door service calls. Id. at 5.
"In further response, SFE Energy noted that at the time of Mr. McDowell's hiring, the Company's compliance staff was using a third-party background check provider. Due to the data entry error, however, the background check for Mr. McDowell did not uncover any criminal history. The Company asserted that the compliance staff member who incorrectly entered the data had just begun processing salesperson certifications on April 15, 2016. According to SFE Energy, it reviewed all of the certifications processed by this staff member and found no additional errors. Id. at 5-6.
"SFE Energy contended that the data entry error was an isolated incident and that it disciplined the compliance staff member involved in the matter. Further, the Company stated that it has retrained its compliance staff regarding sales person certification background check processes. SFE Energy confirmed that it terminated Mr. McDowell from his position as a door-to-door sales agent immediately after the incident. The Company also accepted full responsibility for the actions of all of its agents including Mr. McDowell. Settlement at 6.
"In its investigation, I&E concluded that a sales agent of SFE Energy engaged in criminal activity on one occasion while conducting door-to-door sales activity on behalf of the Company. As a result, I&E was prepared to allege in a formal complaint that SFE Energy or an agent of the Company permitted a person to conduct door-to-door sales and marketing activities before it had obtained and reviewed a criminal history record from the Pennsylvania State Police and from every other state in which the person resided within the last twelve months. According to I&E, the allegation against the Company, if proven, would be a one count violation of 52 Pa. Code § 111.4(b). Settlement at 7.
"The proposed Settlement has been filed by the Parties to resolve allegations of EGS marketing violations. The Parties urge the Commission to approve the Settlement as being in the public interest. Id. at 14."
SFE Energy provided the following statement to RetailEnergyX.com:
Statement From SFE Energy:
"SFE has a well-established compliance process and holds compliance with the applicable Pennsylvania Code provisions governing retail suppliers to the highest standards.
"The Commission notably stated in its Order that:
• "The Commission acknowledged that the incident appeared to have been a one-time occurrence. Order at 8
• "The Commission agreed that SFE’s actions, after learning of the incident, were appropriate and helped to reduce the likelihood of a similar incident occurring in the future. Order at 9
• "The Commission further found that SFE Energy has a satisfactory compliance history and that this incident was of a singular, non-recurring nature. Order at 9,10
"SFE took full responsibility for this unfortunate, isolated incident that arose as a result of a simple clerical error. It is important to note that SFE proactively addressed this isolated incident and worked collaboratively with Commission’s staff during the investigative phase and settlement discussions. Additionally, none of the provisions in the Settlement Agreement are considered an admission of any fact or culpability and were entered into in order to amicably resolve the matter.
"SFE does not oppose the Commission’s approval of the Settlement, as modified, and looks forward to the conclusion of this matter."