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Post date: November 21 2003

Attorney General Reaches Settlement With Energy Provider

Attorney General Spitzer today announced a $300,000 settlement with a Rockland-based energy supplier which markets and sells electricity and natural gas to consumers across New York State.

The settlement ends a lawsuit filed in Supreme Court, New York County by the Attorney General's Office against ECONnergy Energy Company, Inc (ECONnergy) in March 2002. The settlement requires the company to: modify its advertising and marketing practices; clarify contract terms for customers; and pay penalties, costs, and restitution. The settlement also requires ECONnergy to comply with New York laws requiring that customers be given three days to cancel any purchases made through door-to-door sales. In addition, the company will waive outstanding balances for short-term customers who were recruited through door-to-door sales.

ECONnergy supplies electricity and natural gas to approximately 300,000 customers in the metro-New York area, its suburbs, and upstate regions such as the Capital District, Mohawk Valley and Central New York. The electricity and/or natural gas is delivered to ECONnergy's customers by a regulated utility such as Consolidated Edison Company, KeySpan Energy Corporation, Niagara Mohawk Power Corporation, or Orange & Rockland Utilities, Inc.

The investigation by the Attorney General's office found that ECONnergy's sales representatives engaged in illegal "slamming," the practice of unauthorized switching of electric and natural gas customers. According to some it is alleged that their signatures were forged on ECONnergy contracts. The investigation also found that ECONnergy's sales representatives misrepresented the potential savings customers would accrue by switching to ECONnergy, and in some cases, led customers to believe they were representing the local utility company.

"New Yorkers now have an opportunity to choose their electric providers, but with that choice can come confusion and in some cases deception," Spitzer said. "Like other energy service companies, ECONnergy must clearly disclose the terms and conditions of its service in language that consumers can easily understand so that they can fully weigh their options in the competitive energy marketplace. My office will continue to monitor companies' advertising and marketing practices so that consumers can make sound decisions free from unfair and deceptive sales tactics."

Spitzer's investigation also found that ECONnergy's written contracts failed to provide to consumers with the right to cancel within three days as is required by the New York law governing door-to-door sales.

Over the past three years, the Attorney General's office has reviewed approximately 300 consumer complaints about ECONnergy's sales practices.

To participate in the restitution program, current and former customers should contact ECONnergy by calling 1-800-805-8586 or by writing to: New York State Attorney General Spitzer, Telecommunications & Energy Bureau, Attn.: ECONnergy Settlement, 120 Broadway, New York, NY, 10271. The deadline to file claims for restitution is December 22, 2003.

The case was handled by Assistant Attorney General Enver R. Acevedo of the Telecommunications and Energy Bureau, and Assistant Attorney General in Charge Gary S. Brown of the Westchester Regional Office.