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Excerpts from the Ohio Public Utilities Commission’s Opinion & Order adopting a settlement agreement filed by Inspire Energy Holdings, LLC and Staff addressing the marketing, solicitation, and customer enrollment issues:

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SUMMARY

{¶ 1} The Commission adopts the settlement agreement filed by Inspire Energy Holdings, LLC and Staff addressing the marketing, solicitation, and customer enrollment issues identified by Staff. {***}

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Conclusion 

{¶ 49} Upon consideration of the record evidence put forth by the parties, the Commission finds that the Settlement Agreement is reasonable and should be adopted. The Commission determines that Ohio Adm.Code 4901:1-23-04(A) and 4901:1-34-05(A) permit Inspire Energy and Staff to enter into an agreement for the purpose of resolving any alleged violations of the CRES or CRNGS minimum standards and service requirements, respectively. OCC contends that the Settlement Agreement fails to satisfy the Commission’s three-prong test traditionally used to determine the reasonableness of a stipulation, in which the Commission evaluates the stipulation based on the following criteria: (1) if the settlement is a product of serious bargaining among capable, knowledgeable parties; (2) if the settlement, as a package, benefits ratepayers and the public interest; and (3) if the settlement package violates any important regulatory principle or practice. However, Commission precedent dictates that this test is inapplicable in this case; instead, the Commission will continue to utilize a simple reasonableness standard to evaluate whether a proposed settlement agreement submitted pursuant to Ohio Adm.Code Chapters 4901:1- 23 and/or 4901:1-34 should be approved. See SmartEnergy Case, Finding and Order (Aug. 23, 2023) at ¶ 7; Ambit Case, Finding and Order (May 18, 2022) at ¶ 7; Think Energy Case, Finding and Order (July 11, 2018) at ¶ 6. 

{¶ 50} We are unpersuaded by OCC’s arguments that the Commission’s three-prong test is applicable; we agree with the Signatory Parties’ arguments that applying the three-prong test to this case runs contrary to the Commission’s well-established PNC process under the CRES/CRNGS Enforcement Rules. The Commission notes that no other party must be involved in order for Staff to reach a noncompliance settlement with a regulated entity, and as authorized by statute, the Commission reviews final settlement agreements submitted in its noncompliance cases. If the Commission applied the three prong stipulation test to the Settlement Agreement at hand, the CRES/CRNGS Enforcement Rules’ provisions regarding PNC settlements would be redundant. As such, the Commission determines that the settlement process concerning PNCs is distinguished from the Commission’s consideration of stipulations pursuant to Ohio Adm.Code 4901-1-30, which are subject to the three-prong test. We are persuaded that the Settlement Agreement is not a stipulation subject to Ohio Adm.Code 4901-1-30, but rather, it is a negotiated agreement between Staff and Inspire Energy filed pursuant to the CRES/CRNGS Enforcement Rules and is, therefore, subject to the reasonableness standard. 

{¶ 51} Thus, the Commission considers the Settlement Agreement pursuant to its enforcement authority under Ohio Adm.Code Chapters 4901:1-23 and 4901:1-34. We reiterate that the issue before the Commission is whether the Settlement Agreement is reasonable and should be adopted. The Settlement Agreement states that Inspire Energy has implemented multiple corrective actions in response to the violations alleged in the Amended PNC. After reviewing further evidence submitted during the rehearing and briefed arguments by Inspire Energy, Staff, OCC, and RESA, we find that the Settlement Agreement is just and reasonable. The record supports the conclusion that Inspire Energy has properly addressed and remediated the alleged violations outlined in the Amended PNC. For instance, as a result of the Amended PNC and Settlement Agreement, Inspire Energy has ceased all door-to-door sales in Ohio starting on May 2023 and has blacklisted eight third-party representatives who were involved in the customer complaints made to the Commission in 2022 (Inspire Ex. 1 at 10, 14). Moreover, Inspire Energy no longer contracts with any third-party vendors to sell any Inspire Energy products in Ohio (Inspire Ex. 1 at 14). Furthermore, Inspire Energy ceased offering the sub-trial product and rerated its applicable customers (Inspire Ex. 1 at 18). 

{¶ 52} Regarding OCC’s recommended corrective actions, we address them accordingly. First, as discussed above, Inspire Energy no longer markets or enrolls Ohio consumers as of May 2023 (Inspire Ex. 1 at 14). While OCC claims that the Settlement Agreement itself allows Inspire Energy to offer its unlawful product upon the notification of sale with Staff, this is simply an incorrect premise. We note that the Settlement Agreement specifies that Inspire Energy would need to notify Staff should it choose to sell its product to Ohio consumers again. However, because the product was found in probable noncompliance, upon any notification of Inspire Energy’s intent to reintroduce such a product in Ohio, Staff could take measures to prevent the action. OCC mistakes the required notification to Staff as a formality rather than a critical enforcement mechanism by which the Commission, through Staff, would ensure that unlawful products are not sold to Ohio consumers. We also recognize that per Inspire Energy’s confirmation, the Company has ceased contracts with its third-party vendors to sell products in Ohio. Thus, there is no need to implement OCC’s fourth recommendation to cease the utilization of third-party sales vendors, as it would be redundant (Inspire Ex. 1 at 14; OCC Ex. 1 at 26). 

{¶ 53} Second, the Commission finds that there is no reason to further modify the Settlement Agreement to discontinue service to all consumers enrolled in the flat-rate subscription plan that had the introductory rate and continued through an automatic renewal. We note that after negotiations, Staff and Inspire Energy agreed that Inspire Energy would send notices to two classes of customers: 1) all former customers who enrolled under the introductory trial rate subscription product and actually paid a customized price, and 2) all current customers who enrolled in the introductory trial rate subscription product between June 1, 2022, and the date the Settlement Agreement was adopted and approved by the Commission. We recognize that Staff approved the language to be used and filed the notices as exhibits to the Settlement Agreement. See Joint Ex. 1 at Ex. B, C. The Settlement Agreement also requires that Inspire Energy notify Staff with the number of notices sent and the results of the notifications. And we recognize that Staff indicates that the final notice requirements were tailored to reach those customers who enrolled on Inspire Energy’s low introductory rate subscription product and are most likely to have been harmed by its alleged violations. We find that the execution of these terms is reasonable such that we do not need to discontinue any customers who were ultimately notified of the pending case and allowed for the auto-renewal of their product. 

{¶ 54} We also reject OCC’s recommendation that remaining customers need to be rerated, as evidence submitted to the record indicates that those customers who wished to be rerated for the unlawful introductory rate product already were. The Commission recognizes that Inspire Energy sent a total of 1,211 renewal notices to customers containing the agreed upon notification language, and that none of those customers requested a rerate, but 18 customers discontinued their service with Inspire Energy. Inspire Energy also sent 4,502 notification letters to former customers, and some of those customers requested and received a rerate. (Inspire Ex. 1 at 11 – 13.) Therefore, we are satisfied by the result of the Settlement Agreement’s notification terms and do not find it necessary to implement a sweeping rerate of all former and current customers who had service through the flat-rate subscription plan with the introductory rate and/or continued through the automatic renewal. 

{¶ 55} In response to OCC’s request to assess Inspire Energy a forfeiture of $1.6 million, the Commission notes that Staff confirms Inspire Energy’s payment of the assessed forfeiture in the Settlement Agreement. We determine that the assessment of this forfeiture, which is only $5,000 less than the amount initially proposed by Staff, reasonably satisfies the forfeiture component as proposed in the Amended PNC, while also reflecting the Settlement Agreement negotiation process. 

{¶ 56} Lastly, we address OCC’s insistence that the Settlement Agreement is not reasonable because it does not require that Inspire Energy’s request for a waiver of third party verification rules in Case No. 22-29-GE-UNC be withdrawn; nor is the Company broadly banned from seeking future waivers. Although parties to settlement agreements often leverage other pending cases to reach a specific end, there is no requirement that this negotiation strategy be utilized. Furthermore, we find OCC’s request to deny Inspire Energy any future waivers of Commission rules unreasonable, as this proceeding involves a PNC sent by Staff regarding probable non-compliance of specific Commission rules. An entire ban on the Company’s ability to apply for waiver of other Commission rules is a disproportionate consequence of a PNC issuance. 

{¶ 57} Based on the foregoing, the Commission determines that the Settlement Agreement between Inspire Energy and Staff represents a reasonable resolution of this matter and that it should be adopted. {***}

Opinion & Order  (12/18/2024) 

Stipulation Finding & Order  (12/13/2023)

23-0720-GE-UNC  (09/05/2023)

Inspire Energy Holding, LLC