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Agent's Claims Spark Conversation and a Fine

2733741_mIn what is certainly an interesting legal precedent within the state of Pennsylvania, an Administrative Law Judge has ruled that a sales agent’s claims that a rate was “competitive” violated the state’s Public Utility Code. In the energy industry, we’re all aware of several very basic things that sales agents should never do on a sales call. There should never be a guarantee of savings unless that is the program’s design, and there should never be any confusion about what company the agent is affiliated with. Beyond these cardinal rules of energy procedure, things can get a bit muddy, since often times no precedent exists.

This was exactly the case against one Pennsylvania energy company recently. The agent made a simple claim that the rate offered by the company would be a “competitive” variable rate. When it turned out that that rate was higher than the utility’s rate, the definition of “competitive” came into question.

In his findings, the Administrative Law Judge noted that no definition of the word “competitive” appears anywhere in the Public Utility Code or PUC regulations. Instead, he turned to Webster’s dictionary for a definition: "as good as or better than others of the same kind: able to compete successfully with others."

With this definition adopted, calling rates “competitive” within the state of Pennsylvania is likely now just as verboten as guaranteeing a savings. Even a loss, where the company’s rates were just five percent higher than the utility’s, could be construed as a violation of the statement that the rate would remain competitive.

The regulatory and administrative background of the energy industry is complex and ever-changing. Deregulated energy programs have been around for barely 20 years now, so it’s no surprise that major new precedents like this are still being set. Here at The Sales Verification Company, we keep an eye on important issues like these to help better serve our clients. Knowledge is power. Contact us today for a consultation.