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Maine PUC Issues Order Involving Central Maine Power

  • Aug 6, 2020 9:24 am GMT
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AUGUSTA, Maine, Aug. 6 -- The Maine Public Utilities Commission issued the following order (Docket No. 2020-00017):

PUBLIC UTILITIES COMMISSION Investigation of Improper Notices by Central Maine Power Company (35-A M.R.S. Sec. 1303).

BARTLETT, Chair; WILLIAMSON and DAVIS, Commissioners

I. SUMMARY

With this order, under 35-A M.R.S. Sec. 1508-A and 5 M.R.S. Sec. 9053(3), the Commission accepts Central Maine Power Company's (CMP or the Company) consent to: (a) a finding that, in delivering notices stating that it could disconnect customers in the wintertime without the approval of the Commission, it violated the Commission's consumer-protection rules; and (b) payment of the maximum administrative penalty amount--$500,000--for any related series of violations.

The Commission also orders, under 35-A M.R.S. Sec. 117, that the penalty payment be applied as a bill credit in an equal amount to the utility accounts of CMP customers who participated in the Company's electricity lifeline program (ELP) during the 2019-2020 ELP year.

II. FACTUAL AND PROCEDURAL HISTORY

A. Events Leading to Investigation

On two separate occasions in 2018--March 6 and December 21--the Director of the Commission's Consumer Assistance and Safety Division (CASD) notified CMP that one of its winter-disconnection notices left behind after a site visit contained language that was inconsistent with Chapter 815, Sec. 10(M) of the Commission's consumer-protection rules and told the utility to immediately stop using the notices. The language at issue in the notices was the statement that if the customer failed to respond to the notice, the customer's service could be disconnected during the winter period without the permission of the CASD or without the permission of the Commission. The Company agreed to cease using the notices and to remove that specific language./1

Despite this assertion, the Commission was informed in early 2020 that some CMP customers received notices stating that their service could be disconnected in the winter period without Commission approval.

B. Description of Consumer-Protection Rule at Issue

Under Commission rules, a utility cannot disconnect electric service to an occupied residence within the "winter disconnection period" (November 15 through April 15) without approval of the CASD. MPUC Rules, ch. 815, Sec. 10. The rule also has an exception to that prohibition: when the residence is unoccupied, a utility may disconnect without the approval of the CASD. In these situations, after attempting to contact the customer and visiting the customer's residence, if a utility is sure that a residence is not occupied, it may disconnect the service without the permission of the CASD. Id. Sec. 10(M). If, however, the utility learns that the residence is occupied, the utility must immediately reconnect the service and seek permission from the CASD if it wishes to continue pursuing disconnection.

C. January 22, 2020: Notice of Investigation and Order to Show Cause

On January 22, 2020, the Commission issued a Notice of Investigation and Order to Show Cause describing the events that led to this investigation./2

That order stated that any notices suggesting that CMP can disconnect service within the winter-disconnection period when a residence is occupied without CASD authorization are inaccurate and misleading. Id. at 2. According to the order, if CMP issued such notices, it violated Chapter 815, Sec. 10(M). The Commission thus initiated a formal investigation, under 35-A M.R.S. Sec. 1303(2), to determine whether CMP violated Commission rules or otherwise misled its customers. One objective was to determine whether CMP sent information to customers stating that it could disconnect their service without Commission approval in violation of the winter-disconnection rules. Id.

The Commission added that a utility that willfully violates Commission rules may be subject to an administrative penalty of up to $5,000 per violation, up to a maximum of $500,000 for any related series of violations. 35-A M.R.S. Sec. 1508-A(1)(A). A utility that violates Commission rules and received notice of the violation may be subject to an administrative penalty of up to $500,000 for any related series of violations. Id. Sec. 1508-A(1)(B). The investigation was to consider whether any such violation was "willful" within the meaning of 35-A M.R.S. Sec. 1508-A. If CMP was found to have violated specific rules or provided misleading information, the Commission would consider whether administrative penalties should be imposed and the amount of such penalties under 35-A M.R.S. Sec. 1508-A./3

The Commission directed CMP to file a response that (a) included a detailed statement of whether and how many misleading notices were sent to customers, (b) explained why the notices were sent or delivered, and (c) showed cause why CMP should not be subject to administrative penalties for any notices found to violate Commission rules. Id. The Commission explained that, after CMP's filing, it would determine the next steps in this investigation, including whether to impose administrative penalties and the amount of those penalties. The deadline for CMP's filing was January 28, 2020.

D. January 28, 2020: CMP's Response to the Show-Cause Order CMP filed its response to the show-cause order by the deadline. CMP explained that it has stopped telling customers it could disconnect service without Commission approval. CMP Response at 2. CMP stated that it believed its winter-disconnection communications technically complied with the Commission's rules, and pointed out that CMP had not disconnected any residential customers in the winter period since 2017. Id. at 1-2. CMP stated that it was not clear in its communications about CMP's right to cycle-disconnect service during the winter months./4

Id. at 3.

CMP's response described the factual background of the relevant winter-disconnection communications. Id. at 3-12. CMP used three different types of customer communications that contained the language at issue:

(1) A premises visit, or PV, package, is hand-delivered to a customer's premises in an attempt to make personal contact with customers who are in arrears during the winter period. Id. at 4. The PV package contains several pieces of information and encourages the customer to contact CMP to avoid being disconnected. Id. In October 2018, after receipt of the Deputy Director's March 6, 2018 email, CMP revised the PV notice to remove the language stating that CMP can disconnect a customer's electric service "during the winter months without the approval of the Maine Public Utilities Commission." Id. Nevertheless, 102 PV packages that were delivered to customers in January 2020 by two of CMP's service centers included outdated PV notices from 2017 that contained the language. Id. at 4, 6.

(2) Letter 180is a letter CMP sends when CMP is unable to make personal contact with the customer when delivering the PV package. Id. at 5. The version of Letter 180 which CMP was using prior to the date of the Commission's January 22, 2020 Notice stated, "[w]hen we are not able to contact you, we can disconnect your electric service during the winter months without the approval of the Maine Public Utilities Commission's (MPUC) Consumer Assistance and Safety Division (CASD)." Id. CMP stated that, in making this representation, it was relying on the cycle disconnection provisions of Chapter 815. After receiving the CASD Director's December 21, 2018 communication, CMP did not change the wording of Letter 180. Id. In the 2018-2019 winter period, CMP sent 14,892 such letters; in 2019-2020, it sent 986.

(3) Letter 310 is a letter CMP hand-delivers to a location when a landlord asks that service be turned off or taken out of their name and CMP does not have a new responsible party to bill. Letter 310 stated, "[y]our electric service can be disconnected during the winter months without the approval of the Maine Public Utilities Commission (MPUC) Consumer Assistance and Safety Division (CASD)." Id. at 6. CMP stated that, in making this representation, it was relying on the cycle-disconnection provisions of Chapter 815./5

Id. After receiving the CASD Director's December 21, 2018 communication, CMP did not change the wording of Letter 310. Id. In the 2018-2019 winter period, CMP sent 995 such letters; in 2019-2020, it sent 470. Id.

CMP stated that the only type of disconnection it may do in wintertime is cycle-disconnection, and that is the type of disconnection referred to in the notices. CMP added that this fact, combined with the fact that no disconnections occurred in these winter periods, shows that CMP did not violate Chapter 815. Id. at 8.

CMP also responded to the order to show cause why it should not be subject to administrative penalties for any violation. Id. at 12-14. In its response, CMP explained that it had changed its "PV notice to delete the questioned language in October 2018, but regrettably, despite clear instructions to dispose of outdated PV materials," the old forms were delivered to 102 customers in Belfast and Rockland areas recently. CMP argued that this "was in no way a willful violation," in that "CMP had every intention of delivering PV packets that did not include the questioned language." Id. at 12-13. CMP also argued that it was not a violation following notice from the Commission because CMP changed the PV notices after notice in March 2018; CMP only delivered the old form to customers in error. Id. at 13. As for Letters 180 and 310, CMP explained that its longstanding intent in using the language at issue in the winter-disconnection materials is to provide customers notice that CMP has the right to conduct cycle-disconnections without Commission approval--something Chapter 815 plainly allows. Id.at 13-14.

CMP added that it: "always intended to act in 100% compliance with Commission rules"; has shared its disconnection materials with the CASD "several times over the years"; "has no history or practice of disconnecting customers in the winter period without the required approval of the CASD" except for cycle-disconnections; and has not disconnected any residential customer, including by cycle-disconnection, in the winter since before the 2017-2018 winter. Id. at 14.

E. February 2020: Interventions, Schedule, and Written Discovery

The Examiners set a deadline for petitions to intervene and scheduled an initial case conference./6

The Examiners also proposed a litigation schedule to be discussed at the initial case conference. The procedural order explained that interested persons who did not receive notices with the language at issue may not meet the standard for mandatory intervention./7

Timely petitions to intervene were filed by the OPA, Kristy Pottle (pro se), Darien Sawyer (pro se), and Debbie Carroll, Ed Solano, Hayley disconnect from the CASD or may cycle Pendergast, and Kily Hilton (all represented by counsel). On February 14, 2020, counsel for the customers intervenors moved to substitute Brett Deane and Joleen Mitchell for Debbie Carroll, Ed Solano, and Kily Hilton; on February 17, 2020, counsel filed a petition to intervene of Mr. Deane and Ms. Mitchell.

The OPA, Mr. Deane, Ms. Mitchell, and Ms. Pendergast (the customer-intervenors) were granted mandatory intervention (Ms. Carroll, Mr. Solano, and Ms. Hilton were originally granted discretionary intervention but were soon after replaced as parties)./8

Ms. Pottle and Mr. Sawyer were granted discretionary intervention because they did not show that they were affected by the issues in the case./9

The Examiners seta schedule to resolve the case as efficiently as possible, culminating with a hearing, briefs, and a decision by April 2020./10

Written discovery on CMP's response to the show-cause order followed in February 2020. The Staff, the OPA, and ratepayers Mr. Deane, Ms. Mitchell, and Ms. Pendergast posed written data requests.

F. March-April 2020: First Stage of Settlement Procedures and Suspension of Schedule

On February 27, 2020, CMP and the OPA filed a letter seeking to begin settlement discussions, requesting a protective order to preserve the confidentiality of those discussions, and asking that litigation be suspended to allow settlement negotiations to commence. On March 10, 2020, CMP filed a request for a protective order to preserve the confidentiality of settlement discussions. Counsel for three customer-intervenors initially objected to suspending the litigation schedule and holding settlement discussions confidentially, but in a March 2, 2020, letter withdrew the objection to suspending the schedule and at a March 11, 2020 case conference withdrew the objection to confidential settlement discussions. At the March 11 case conference, the Examiners orally granted the request for the protective order. The written protective order issued the next day./11

The parties that participated in settlement discussion agreed to Staff's participating in those discussions. Tr. at 10 (Mar. 11, 2020 Case Conf.).

Through two procedural orders, at the active parties' request, the litigation schedule was suspended through April 20, 2020 to allow settlement negotiations to occur./12

Settlement conferences were held March 11, March 18, March 26, and April 14, 2020./13

Dial-in information for all settlement conferences was provided via email to all parties. The discretionary parties did not participate in settlement but were notified of all settlement conferences via email or via procedural order. Drafts of settlement term sheets were shared via email or through confidential filings in the docket.

G. April 2020: Establishment of New Litigation Schedule

At the fourth settlement conference, on April 14, 2020, the parties reported that they had not reached agreement on a stipulation. The Examiners thus set a new litigation schedule beginning where the last left off, with written testimony of customers due on April 27, a hearing in July, and, ultimately, deliberations in August./14

H. April-May 2020: Second Stage of Settlement Procedures and Suspension of Schedule

On April 27, 2020, CMP filed a proposed stipulation in the docket for discussion. CMP reported that the OPA would join the stipulation, and that intervenors Deane, Mitchell, and Pendergast objected only to Paragraph 37 of the stipulation, which would govern how the penalty amount would be disposed of. Telephonic settlement conferences were held April 30 and May 5, 2020./15

Dial-in information for these conferences was provided via email to all parties.

On May 8, 2020, CMP filed a stipulation signed by CMP and the OPA, along with the stipulation cover letter and incorporated memorandum supporting the stipulation. The active customer-intervenors did not join the stipulation, objecting only to one paragraph--Paragraph 37. The Examiners set deadlines for parties' comments on the stipulation and for briefs relating to Paragraph 37./16

No party requested a suspension of the new litigation schedule, but given the posture of settlement, on May 11, 2020, the Examiners suspended it./17

I. June 8, 2020: Order Rejecting Stipulation

On June 8, 2020, the Commission issued an order rejecting the stipulation. The sole reason for the rejection of the stipulation related to the provisions of Paragraph 37. Paragraph 37 provided that the penalty funds would be directed to "a fund used to pay account arrearages of CMP residential customers who have experienced economic distress as a result of the Covid-19 contagion 18 in a manner designated by the OPA, in consultation with the Office of the Governor and CASD." Paragraph 37 stated that the OPA anticipated directing the funds to the Energy Crisis Intervention Program administered by the Maine State Housing Authority, or a similar fund administered by another state agency.

J. June 2020-July 2020: Final Procedures; Final Settlement Conference; Offer of Proof

On June 2, 2020, the Hearing Examiners issued a procedural order stating that "In light of [the Commission's decision], and in order to move this investigation forward, parties are directed to file any requests they may have for further process."19 The deadline for comments was June 8, 2020. Only the OPA and CMP filed comments, and neither sought more process. The OPA suggested it might seek reconsideration of the Commission's June 8, 2020 order. CMP explained that it assented to an admission that it violated a Commission rule and to paying the administrative penalty amount of $500,000, and thus sought no additional process. If more process was deemed necessary, CMP stated that the matter should go directly to a hearing.

A telephonic case conference was held June 16, 2020 "to discuss the parties' comments and how this case may proceed to resolution."/20

The June 16, 2020 case conference was followed by a brief settlement conference. No settlement was reached, though the parties reported being in the process of negotiations.

On June 16, 2020, after the case conference, the customer-intervenors filed a letter requesting the opportunity to present the testimony of two live witnesses at a hearing, to submit prefiled testimony, and to cross-examine CMP's witnesses.

On June 18, 2020, the Examiners issued a procedural order that: (a) explained that there was no longer any dispute in the case; (b) ruled that the customer-intervenors had failed to submit any prefiled testimony by the deadline of April 27, 2020 and thus they had forfeited that opportunity; and (c) required the customer-intervenors to make an offer of proof showing what relevant information could be elicited in a hearing that would change the conclusion that CMP had violated a rule and was required to pay the full administrative penalty amount--things CMP had already agreed to.

The complete text f the order is available at https://mpuc-cms.maine.gov/CQM.Public.WebUI/Common/ViewDoc.aspx?DocRefId={FFAD8D20-038D-4855-B455-69BD9389F823}&DocExt=pdf

* * *

Footnotes:

1/ Jan. 22, 2020 Notice of Investigation and Order to Show Cause at 1-2; Jan. 28. 2020 Procedural Order at 1. In this order, this language is sometimes referred to as the "problematic language" or the "language at issue."

2/ Jan. 22, 2020 Notice of Investigation and Order to Show Cause at 1-2.

3/ Jan. 22, 2020 Notice of Investigation and Order to Show Cause at 2.

4/ Cycle disconnection is the practice of disconnecting an electrical service in the morning and reconnecting the service at the end of the day.

5/ Section 10(M)(2)(b) of Chapter 815 states: "If the utility is unable to make personal contact with the customer after at least one visit to the residential unit and is uncertain after an on-site inspection whether the unit is inhabited, the utility shall provide a written Notice of Customer Rights by first class mail to the last recorded billing address of the customer. This Notice shall be accompanied by a warning that if a response is not received by the utility within five business days, the utility may either seek permission to disconnect the customer . . . . If a response is received within five business days after the receipt date of the mailing, the utility shall proceed in accordance with the requirements of Section 9(F)(5). If no response has been received by the utility within five business days after the receipt date of the mailing or the mailing is returned to the utility undelivered, the utility may seek permission to disconnect from the CASD . . . or may cycle disconnect . . . ." (emphasis added).

6/ Feb. 3, 2020 Notice of Proceeding and Opportunity to Intervene.

7/ Id.

8/ Feb. 11, 2020 Procedural Order (Interventions and Scheduling); Feb. 18, 2020 Procedural Order (Late Intervenors and Substitution of Parties).

9/ Feb. 11, 2020 Procedural Order (Interventions and Scheduling).

10/ Id.

11/ Mar. 12, 2020 Protective Order No. 3 (Confidential Settlement Information).

12/ Mar. 3, 2020 Procedural Order (Scheduling) at 2.

13/ Id.; Mar. 12, 2020 Procedural Order Scheduling Settlement Conference; Apr. 13, 2020 Procedural Order (Scheduling).

14/ Apr. 15, 2020 Procedural Order (Scheduling).

15/ Apr. 29, 2020 Procedural Order (Scheduling); Apr. 30, 2020 Procedural Order (Scheduling).

16/ May 6, 2020 Procedural Order (Scheduling).

17/ May 11, 2020 Procedural Order (Scheduling).

18/ Since the beginning of 2020, a novel coronavirus causing a disease known as Covid-19 has created a global pandemic. The pandemic has had significant adverse economic and social effects. See Public Utilities Commission, Emergency Moratorium on Disconnection Activities Due to Covid-19 Pandemic, Docket No. 2020-00081, Request for Comment (July 13, 2020).

19/ This procedural order issued the same day the Commission deliberated this matter, though six days before the final written order issued.

20/ June 10, 2020 Procedural Order (Scheduling).

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