Kathleen Kane | The Office of Pennsylvania Attorney General Kathleen Kane

An electric generation supplier will pay approximately $2.3 million in refunds as part of a proposed settlement recently reached with Pennsylvania Attorney General Kathleen Kane.

Energy Services Providers, Inc. allegedly practiced deceptive marketing tactics for its variable electric rates to Pennsylvania consumers. Kane and Acting Consumer Advocate Tanya J. McCloskey received a number of complaints from the consumers about the rising costs of their electricity rates last winter.

The company, which does business as Pennsylvania Gas and Electric (PaG&E), agreed on the $2.3 million in refunds to all eligible consumers in addition to the $4.5 million it has already paid. PaG&E also will pay $100,000 as a contribution to the Electric Distribution Companies' hardship funds and a $25,000 civil penalty.

As part of the settlement, for the next 18 months the company can only offer fixed-rate contracts for terms longer than six months. If the company begins to offer variable rate contracts after the 18-month moratorium, it will be required to explain to customers that the prices could fluctuate on a monthly basis. A third-party settlement administrator will contact eligible consumers who were on variable rate plans in January, February and March 2014.

The Administrative Law Judges and Public Utility Commission still must approve the settlement before it is final. The settlement resolves one of five actions against electric generation suppliers filed by the attorney general's office and office of consumer advocate. The other four companies are still in litigation.

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