Opinion
HHBCV166034948S
12-28-2017
LIBERTY POWER HOLDINGS, LLC v. PUBLIC UTILITIES REGULATORY AUTHORITY
UNPUBLISHED OPINION
OPINION
Sheila A. Huddleston, Judge
This administrative appeal concerns the statutory and regulatory provisions governing " back-billing" by electric suppliers. " Back billing" colloquially describes the belated billing of customers for services that were previously provided but inaccurately billed. Back billing is permitted under General Statutes § 16-259a(b), but only under conditions prescribed in § 16-259a(b) and (d). In this appeal, the plaintiff, Liberty Power Holdings, LLC (Liberty), challenges the final decision of the Public Utilities Regulatory Authority (PURA), which found that Liberty’s back-billing of 121 customers in 2014 violated § 16-259a(d). PURA imposed a civil penalty of $60,500 for Liberty’s back-billing violations.
On appeal, Liberty contends that (1) PURA misconstrued § 16-259a(d) to require that a payment plan be provided to customers contemporaneously with a bill for amounts that were back-billed; (2) PURA’s imposition of a $60,500 penalty was inconsistent with governing regulations, arbitrary and capricious in its consideration of factors relevant to a penalty, and inconsistent with its treatment of other violators; and (3) PURA acted arbitrarily, capriciously, and in abuse of its discretion in ordering Liberty to reimburse its electric distribution company for rebilling services at 2016 contract rates rather than the rates in effect at the time of the rebilling in 2014.
PURA and the Office of Consumer Counsel (consumer counsel), which participated in the proceedings before PURA and intervened as a defendant in this appeal, argue that PURA correctly construed § 16-259a and that its finding of a violation is supported by substantial evidence in the record. They further argue that the penalty imposed was well within PURA’s statutory discretion and that PURA properly considered all relevant factors. As to the order regarding payment for 2014 rebilling services at 2016 rates, they argue that the amount at issue is de minimis and does not affect Liberty’s substantial rights.
For the reasons stated below, the court concludes that PURA properly interpreted and applied § 16-259a. It further concludes, however, that PURA’s assessment of the penalty was based, in part, on an improper consideration of customer complaints against Liberty in a separate docket matter that resulted in a settlement agreement, and it remands the matter to PURA for reconsideration of the penalty. It rejects Liberty’s other claims with respect to the penalty. Finally, it concludes that PURA’s order requiring Liberty to pay for 2014 rebilling services at 2016 rates was, in the absence of any stated reason for the order, arbitrary and prejudices Liberty’s substantial rights. In sum, the court upholds PURA’s finding of a violation but orders it to reconsider the penalty without considering the customer complaints underlying a settled dispute and to revise its order regarding reimbursement of the electric distribution company in accordance with this decision.
I
BACKGROUND
Liberty is a limited liability company, incorporated in Delaware, with its principal place of business in Fort Lauderdale, Florida. In 2007, in Docket No. 06-12-07, PURA granted Liberty an electric supplier license to provide electric generation services to commercial and industrial customers in Connecticut. In 2008, PURA expanded Liberty’s license to allow it to provide electric generation services to residential customers.
Liberty bills certain of its Connecticut customers in a " rate ready billing system with purchase of receivables" under an agreement with the Connecticut Light and Power Company (CL & P) d/b/a Eversource, an electric distribution company. Eversource provides the distribution infrastructure, including but not limited to transmission lines and meters, and billing services. Each month, Liberty sends to Eversource, through an electronic data interchange (EDI), the electric generation rate to be applied for each of Liberty’s customers. Rates are expressed in cents per kilowatt hour (kWh) and vary from customer to customer depending upon each customer’s specific contract with Liberty. Some customers have contracts with rates fixed for a specific period of time; other customers have contracts with rates that vary from month to month based on Liberty’s costs for the generation services. When Eversource receives the rate information through Liberty’s EDI transmission, it automatically applies the rate for each customer to generate a bill that includes separate charges for electric generation services, distribution services, and various taxes and other regulatory charges. Eversource purchases Liberty’s receivables at the time of billing and assumes the costs and risks of billing and collection.
Since January 2015, CL & P has done business under the name Eversource. Because this proceeding began in 2014, before the change in names, some references in the record are to CL & P and some are to Eversource. PURA uses the name " Eversource" throughout the decision that is at issue in this appeal. This court will do the same. The sole exception will be references to a decision involving CL & P that was issued by PURA’s predecessor agency in 2008; discussion of that decision will refer to CL & P.
Under the terms of Liberty’s fixed rate contracts with its customers, the electric generation rate remains the same throughout the contractual term. Upon the expiration of the fixed rate term, the contract defaults to a variable rate unless the customer cancels its supplier relationship with Liberty or enters into a new fixed rate agreement with Liberty.
II
RELEVANT FACTS
In February 2014, Liberty discovered that, as a result of its own internal technical problems, it had failed to submit rate changes and dates to Eversource for commercial customers whose fixed rate terms had expired during various months in 2013 and early 2014. As a result, those customers had been billed at their previous fixed rates rather than the new variable rates that should have been used. At the same time, an unusual weather event, a polar vortex, brought extreme cold to the area in December 2013, and January and February 2014. This weather event caused the wholesale cost of electric generation services to rise markedly.
Liberty decided to back-bill those commercial customers for the amounts by which it had underbilled them from December 13, 2013, through March 14, 2014. As described in PURA’s final decision, " Liberty calculated the difference between the fixed rates actually billed and the correct variable, monthly rates, multiplied that by the customer’s monthly usage and added necessary taxes to determine the amount each customer owed to Liberty, resulting in the total back charges to collect from each customer. Liberty then estimated each customer’s March 2014 usage and divided the total amount owed from each customer by the customer’s forecasted March usage. Liberty then added the calculated back-bill amount per kWh to the actual variable rate per kWH for the billing cycle in March 2014 to arrive at the total rate per kWh that it needed to collect the correct back-billing charges." Return of Record (ROR), 133. Under a consolidated billing arrangement with an electric distribution company, an electric supplier can collect revenue only through a per kWh charge. As a consequence, Liberty did not send Eversource a total dollar amount to back-bill. Instead, it did a consumption-based calculation and adjusted the rate per kWh to submit through its EDI to Eversource. As a result of the back-billing, the generation rates charged to Liberty’s customers ranged from $0.19039/kWh to rates as high as $2.24168/kWh. As a comparison, Eversource charged a standard service rate of $0.09236/kWh for February and March of 2014.
Under General Statutes § 16-244c(a)(1), " standard service" is the provision of electric generation services by an electric distribution company to a customer who has not elected to receive generation services from an electric supplier. Pursuant to § 16-244c(a)(2), PURA set the rates for standard service.
On March 28, 2014, Liberty submitted the back-billing rates to Eversource through the EDI system for 294 commercial accounts. Of these 294 accounts, twenty-nine would have received bills for generation services for March 2014, in excess of $5,000. One would have received a bill for over $41,000, and another would have received a bill for $38,917.
On April 1, 2014, an Eversource employee noticed Liberty’s extremely high rates and contacted Liberty to ask whether the rates were correct or whether a " decimal place error" had occurred. Liberty confirmed that the rates were correct and subsequently provided Eversource with customer notifications and talking points for use by Eversource’s customer service representatives to explain the rate changes. Eversource then began issuing the bills as directed and informed PURA of Liberty’s actions.
On April 3, 2014, Eversource’s legal counsel contacted Liberty’s counsel regarding the back-billing. On the same day, PURA issued a draft decision to reopen Liberty’s licensing decision for the purpose of reviewing Liberty’s back-billing. It was not until after the draft decision was issued that Liberty terminated its back-billing plan. On April 4, 2014, legal counsel for Liberty and Eversource exchanged several e-mails. In one of those e-mails, Liberty instructed Eversource to cancel any bills that had already been issued and to bill all of the affected customers at the rate of $0.18829/kWh, the variable rate it had established for March 2014.
Liberty submitted back-billing rates for a total of 294 accounts into the EDI system. Only 121 bills were actually generated and issued to customers before Liberty directed Eversource to cancel the bills. Because the bills were canceled and rebilled without any back-billed charges, no back-billed payments were actually collected from any customer.
PURA conducted a proceeding to investigate Liberty’s back-billing. It subsequently issued a notice of violation and assessment of a civil penalty of $294,000 for violations of § 16-259a. Liberty requested a hearing and appointment of prosecutorial staff, which was granted. A hearing was held pursuant to General Statutes § 16-41 on September 2, 2015. After PURA issued a final decision, Liberty moved for reconsideration. PURA granted Liberty’s request for reconsideration. A final decision upon reconsideration was issued on August 9, 2016. ROR, 118-45.
In its final decision, PURA found that Liberty had violated § 16-259a by back-billing customers without establishing a payment plan as required by § 16-259a(d). It assessed a civil penalty of $500 for each of the 121 back-bills actually issued, for a total civil penalty of $60,500. It also required Liberty to reimburse Eversource for all expenses caused by, or related to, Liberty’s back-billing. It ordered that the reimbursement be calculated in accordance with Eversource’s tariffs or electric supplier services agreement effective as of January 1, 2016. This appeal followed.
III
SCOPE OF REVIEW
This appeal is brought and must be reviewed pursuant to the Uniform Administrative Procedure Act (UAPA), General Statutes § 4-166 et seq. The scope of judicial review under the UAPA is governed by General Statutes § 4-183(j), which provides in relevant part: " The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court shall affirm the decision of the agency unless the court finds that substantial rights of the person appealing have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) In violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the agency; (3) made upon unlawful procedure; (4) affected by other error of law; (5) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. If the court finds such prejudice, it shall sustain the appeal and, if appropriate, may render a judgment under subsection (k) of this section or remand the case for further proceedings."
" [R]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency’s findings of basic fact and whether the conclusions drawn from those facts are reasonable ... Neither this court nor the trial court may retry the case or substitute its own judgment for that of the administrative agency on the weight of the evidence or question of fact ... Our ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion." (Internal quotation marks omitted.) Prendergast v. Commissioner of Motor Vehicles, 172 Conn.App. 545, 550, 160 A.3d 1087 (2017).
" The substantial evidence rule governs judicial review of administrative factfinding under the [act]. [See] General Statutes § 4-183(j)(5) and (6). An administrative finding is supported by substantial evidence if the record affords a substantial basis of fact from which the fact in issue can be reasonably inferred ... The substantial evidence rule imposes an important limitation on the power of the courts to overturn a decision of an administrative agency." (Internal quotation marks omitted.) Prendergast v. Commissioner of Motor Vehicles, supra, 172 Conn.App. 550. " It is fundamental that a plaintiff has the burden of proving that the [agency], on the facts before [it], acted contrary to law or in abuse of [its] discretion ..." (Internal quotation marks omitted.) Murphy v. Commissioner of Motor Vehicles, 254 Conn. 333, 343, 757 A.2d 561 (2000).
In addition, " [c]onclusions of law reached by the administrative agency must stand if the court determines that they resulted from a correct application of the law to the facts found and could reasonably and logically follow from such facts ... [Similarly], this court affords deference to the construction of a statute applied by the administrative agency empowered by law to carry out the statute’s purposes." (Internal quotation marks omitted.) Chairperson, Connecticut Medical Examining Board v. Freedom of Information Commission, 310 Conn. 276, 281, 77 A.3d 121 (2013).
" On the other hand, it is the function of the courts to expound and apply governing principles of law." State Medical Society v. Board of Examiners in Podiatry, 208 Conn. 709, 717, 546 A.2d 830 (1988). " [W]hen a state agency’s determination of a question of law has not previously been subjected to judicial scrutiny ... the agency is not entitled to special deference." (Internal quotation marks omitted.) Chairperson, Connecticut Medical Examining Board v. Freedom of Information Commission, supra, 310 Conn. 282.
IV
DISCUSSION
A
General Statutes § 16-259a
Liberty first challenges PURA’s finding that Liberty’s back-billing effort violated General Statutes § 16-259a. It makes several arguments in support of this claim. First, it asserts that § 16-259a(d) requires that a payment plan be offered only when an electric supplier " holds the customer financially liable" for the underbilling. It argues that it did not violate § 16-259a(d) because it cancelled the bills before any payments were due and therefore did not hold any customer financially liable. It also claims that PURA has previously construed the terms " bills" and " holds a customer financially liable" to have different meanings, and that it should apply its earlier analysis here. See Docket No. 08-02-06, DPUC Investigation into the Connecticut Light and Power Company’s Billing Issues (August 6, 2008) (CL & P decision). PURA argues, to the contrary, that the statutory phrase " holds a customer financially liable" encompasses the act of sending a bill and that Liberty violated § 16-259a(d) when it issued, through Eversource, bills that included three months of back-billed charges and did not offer a payment plan. It further argues that the CL & P decision addressed different issues and does not apply to the circumstances presented here.
Whether the phrase " holds a customer financially liable" in § 16-259a(d) includes sending a bill to a customer presents a question of statutory construction. Because PURA’s analysis of this issue has not been subjected to judicial scrutiny or consistently applied over a long period of time, the deference normally accorded to an agency’s interpretation of a statute is not required, and the court must instead apply plenary review. See Dept. of Public Safety v. Freedom of Information Commission, 298 Conn. 703, 717-18, 6 A.3d 763 (2010).
Well-settled principles govern the court’s approach to statutory construction. " When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature ... In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of { the] case ... In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered ... The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation ... When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement and to its relationship to existing legislation and common-law principles governing the same general subject matter." (Internal quotation marks omitted.) Commissioner of Public Safety v. Freedom of Information Commission, 301 Conn. 323, 338, 21 A.3d 737 (2011). A statute must be construed " in a manner that will not thwart its intended purpose or lead to absurd results." (Internal quotation marks omitted.) Gonzalez v. O & G Industries, Inc., 322 Conn. 291, 311, 140 A.3d 950 (2016).
In light of these principles, the court begins, as it must, with the text of the statute. In relevant part, § 16-259a (Rev. to 2017) provides as follows:
Except for a technical amendment in 2014 that has no bearing on this case, the current version of § 16-259a is substantially the same as the version in effect in 2014.
(a) No electric distribution, gas or water company or electric supplier, which inaccurately bills a retail customer for service may bill or otherwise hold the customer financially liable for more than one year after the customer receives such service, unless the customer, either alone or with an individual other than an employee of the company, by an affirmative act, is responsible for the inaccurate billing ...
(b) Any such electric distribution, gas or water company or electric supplier which inaccurately bills a retail customer for service may bill or otherwise hold the customer financially liable for not more than one year after the customer receives such service, unless a delayed bill for the service (1) would deprive the customer of the opportunity to apply for or receive energy assistance or (2) is the result of the customer’s meter erroneously registering another customer’s consumption, in which case the company may not bill or otherwise hold the customer liable for the service provided to another customer ...
* * *
(d) Any ... electric supplier ... that holds a customer financially liable under subsection (a) [or] (b) ... of this section shall establish a payment plan which prorates all arrearages for service the customer owes over a period of time that is no shorter than the period for which the customer is being held financially liable by such ... electric supplier ... The payment plan shall provide that no payment charged to a customer under such plan shall exceed fifty percent of the average amount that the company charged such customer for each billing period over the previous twelve-month period for services received during that period ...
Subsection (c), omitted here, applies to telecommunications services providers.
In general terms, subsections (a), (b), and (d) of § 16-259a limit an electric supplier’s ability to back-bill for its own billing errors. Subsection (a) functions as statute of limitations, limiting any back-billing to one year from the time the customer received the service. Subsection (b) permits back-billing for not more than a year’s services, subject to certain conditions. It is undisputed that Liberty’s back-billing did not violate subsections (a) or (b).
Subsection (d) imposes two conditions on any electric supplier that " holds a customer financially liable" under subsections (a) or (b). First, in general terms, subsection (d) requires the electric supplier to establish a payment plan that prorates the arrearage over a period of time that is no shorter than the period for which the customer was underbilled. Second, the payment plan must provide that no payment charged to a customer under the plan is more than fifty percent of the customer’s average monthly bill during the preceding year.
Liberty points to a difference in the language of subsections (a), (b), and (d). Where subsections (a) and (b) refer to an electric supplier that " bills ... or otherwise holds a customer financially liable ..., " subsection (d) omits " bills" but imposes the payment plan requirement on an electric supplier that " holds a customer financially liable." Because the word " bills" is omitted from subsection (d), Liberty argues that the payment plan requirement does not apply to the mere act of billing, but only to the act of holding a customer financially liable. It claims that it never held any customer financially liable because it cancelled the back-bills before any payments were due.
It is often the case, as Liberty argues, that the " omission of a word otherwise used in the statutes suggests that the legislature intended a different meaning for the alternate term." Viera v. Cohen, 283 Conn. 412, 431, 927 A.2d 843 (2007); see also Plourde v. Liburdi, 207 Conn. 412, 416, 540 A.2d 1054 (1988) (absence of repeatedly used words in the context of same subject matter indicates a difference in legislative intention); M. DeMatteo Construction Co. v. New London, 236 Conn. 710, 717, 674 A.2d 845 (1996) (similar).
On the other hand, the general proposition advanced by Liberty does not require a court to construe a statute in a manner that creates an unwarranted loophole. See Gonzalez v. O & G Industries, Inc., supra, 322 Conn. 311. In determining the meaning of the statute, a court must look " not only at the provision in issue, but also to the broader statutory scheme to ensure the coherency of our construction." (Internal quotation marks omitted.) LaFrance v. Lodmell, 322 Conn. 828, 837-38, 144 A.3d 373 (2016). In this case, Liberty’s argument ignores the significance of the phrase " bills or otherwise holds a customer financially liable" in subsections (a) and (b). The word " otherwise" indicates that an electric supplier may hold a customer financially liable either by billing the customer or in a different way. See Merriam-Webster’s Collegiate Dictionary (11th Ed. 2012) (common meaning of " otherwise" is " in a different way or manner"). The effect of the phrase " otherwise holds the customer financially liable" in subsections (a) and (b) is to expand the reach of § 16-259a beyond the simple act of billing- which is the usual way of holding a customer financially liable- to include any other means that a company might use. Subsection (d) expressly applies to an electric supplier " that holds a customer financially liable under subsection (a), (b), or (c) ..." By its reference back to subsections (a) and (b), subsection (d) encompasses all methods of holding a customer financially liable, including billing.
Common sense must be used in interpreting a statute. See Dorry v. Garden, 313 Conn. 516, 531, 98 A.3d 55 (2014). Common sense compels the court to conclude that the most common way to " hold a customer financially liable" for service charges is to issue a bill, which is a demand for payment. To conclude that the legislature did not intend subsection (d) to apply to the act of billing, in addition to other less common ways of seeking to hold a customer financially liable, would produce bizarre results. In this case, it would mean that a payment plan would be required only if the electric supplier gave a customer a notice, other than a bill, that the customer would be financially liable for an inaccurately billed amount, but a payment plan would not be required if an electric supplier sent the customer a bill that included back-billed charges for the previous twelve months and demanded payment of the total within one payment cycle.
Indeed, the bills issued by Eversource based on the back-billing rates submitted by Liberty in late March and early April of 2014, contained an express demand for payment by a date twenty-eight days after the date of the bill. See, e.g., ROR, 403, 415, 451.
To the extent that Liberty suggests that the omission of " bills" in subsection (d) renders the statute ambiguous, this court concludes that nothing in the legislative history of subsection (d) suggests that the legislature intended to make the distinction advocated by Liberty. Before 1996, General Statutes § 16-259a had only three subsections. Subsections (a) and (b) permitted electric, gas and water companies to bill or otherwise hold a customer financially liable for no more than six months or three billing periods, whichever was longer. Subsection (c) allowed certified telecommunications services providers to bill or otherwise hold customers financially liable for up to two years or the time provided by federal law. See General Statutes § 16-259a(a), (b), and (c) (Rev. to 1995). In 1996, electric companies sought legislation extending the period of time for which they could back-bill to two years. See Conn. Joint Standing Committee Hearings, Energy and Technology, Pt. 1, 1996 Sess., pp. 226-28 (remarks of Tony Vivenzio, customer service manager for United Illuminating). Legislators were concerned, however, that customers and small businesses would be adversely affected by large bills, which could put a struggling small business in a " do or die" situation. Conn. Joint Standing Committee Hearings, Energy and Technology, Pt. 1, 1996 Sess., pp. 228-29 (remarks of Senator Peters). They therefore added subsection (d) to require the company to establish a payment plan at least as long as the period for which the customer was being held responsible and to limit the rate of recovery of the arrearage to fifty percent of the customer’s current monthly bill. See Substitute House Bill No. 5426, 1996 Sess. The proposed bill was subsequently amended to limit the period for which a company could back-bill to one year and to limit the arrearage payments to fifty percent of a customer’s average monthly bill. See 39 H.R. Proc., 1996 Sess., Pt. 8, pp. 2558-59. As the proponent of the amendment stated, the amended bill would " help utility companies collect back unearned revenue and it will not place an undue hardship on the consumers." See id., p. 2559.
Although there is no express explanation of the omission of " bills" from subsection (d), the court concludes that subsection (d) was enacted to protect utility customers from hardships that would unduly imperil their financial circumstances. The court further concludes that the issuance of back-bills comes within the intended scope of the phrase " holds a customer financially liable" in subsection (d).
Liberty contends that it did not violate § 16-259a(d) because it promptly canceled the back-bills. The court disagrees. Liberty’s violation of subsection (d) occurred when the back-bills were issued. Whether and to what extent the cancellation of the bills mitigated the violation is properly considered in relation to the penalty assessed.
Liberty also argues that PURA previously construed " bills" and " holds a customer financially liable" to have different meanings in its decision in the CL & P decision issued in 2008. This argument is unpersuasive. The CL & P decision involved different facts and different legal issues. It did not require PURA to determine whether " billing" was one way of " holding a customer financially liable."
When the CL & P decision was issued, PURA was known as the Department of Public Utility Control (DPUC). For convenience, this court’s references to PURA includes any references to DPUC.
The CL & P decision arose from CL & P’s failure to bill certain customers because of an internal software failure. PURA had to determine (1) whether General Statutes § 16-259a applied to a " non-billing" situation; (2) if it did, whether the one-year period was a statute of limitations or a limitation on the period in which CL & P could collect payments; and (3) where a bill had not been sent, what other actions would " hold the customer financially liable" for the purpose of applying the one-year limitation. In resolving these questions, PURA determined that § 16-259a applies to a non-billing situation as well as an underbilling situation. CL & P Decision, 16. PURA concluded that the one-year limitation functioned like any other statute of limitations to limit the period for which CL & P could back-bill, not to limit the time in which it could collect the payments. CL & P Decision, 19-20. Finally, PURA determined that the one-year period would be measured from the first time that CL & P put customers on notice that they would be held liable for inaccurately billed past charges. CL & P Decision, 21-22.
In determining how to measure the one-year limitation period in these circumstances, PURA discussed the difference between " bill" and " hold a customer financially liable." It concluded that " as used in subsection (a) of section 16-259a, ‘bill’ means to issue a billing statement containing the amount that the customer must pay. Billing can be used when the amount of recovery has already been confirmed. Alternatively, if a bill cannot be issued because the exact amount of the under-billing has yet to be determined, a company may also ‘hold the customer financially liable, ’ which, for purposes of section 16-259a, means putting a customer on notice that the company has discovered a billing problem which might result in the customer owing an arrearage amount that the company intends to collect. This notice, once issued, tolls the one-year clock and allows the company to fully investigate the problem." CL & P Decision, 21-22. In distinguishing between billing and other means of putting a customer on notice of its financial liability, PURA did not suggest that billing itself is not a form of putting a customer on notice of a financial liability. When the CL & P decision is read in its entirety and in the context of the issues raised in it, it does not support Liberty’s argument that the generation of a bill does not trigger the payment plan requirement. The CL & P decision is not inconsistent with this court’s conclusion that § 16-259a(d) encompasses billing.
Notably, in the CL & P decision, PURA, cautioned: " Although a company may recover any amounts that satisfy the requirements of subsection (a) of section 16-259a, the company may not demand the entire payment all at once . Pursuant to subsection (d), the company must establish a payment plan that meets two requirements: all arrearages for service the customer owes must be prorated over a period of time that is no shorter than the period for which the customer is being held financially liable by the company, and no payment under the plan may exceed 50% of the customer’s average monthly bill for the preceding twelve-month period." (Emphasis added.) CL & P Decision, 22.
In sum, § 16-259a(d) requires an electric supplier seeking to back-bill customers to establish a payment plan that (1) prorates the arrearage for a period at least as long as the period for which the supplier is back-billing, and (2) ensures that the monthly arrearage payment is no more than fifty percent of the customer’s average monthly bill over the preceding twelve months. The payment plan must be provided contemporaneously with any back-bill that is issued. PURA did not commit an error of law in finding that Liberty violated subsection (d) by causing Eversource to issue back-bills for generation services without establishing the required payment plans for its customers.
B
Civil Penalty
Liberty claims that PURA’s imposition of a civil penalty of $60,500 was arbitrary, capricious, or an abuse of discretion for the following reasons: (1) PURA failed to consider all the factors required by § 16-245-6 of the Regulations of Connecticut State Agencies; (2) PURA improperly considered prior complaints against Liberty that resulted in a settlement, not a finding of a violation; (3) PURA failed to consider the lack of actual harm to any customers when determining the gravity of the violation; (4) PURA’s imposition of a penalty on Liberty is inconsistent with its decisions as to other violators, where it did not impose penalties, or imposed significantly lighter penalties, for more egregious violations of the law; (5) PURA’s findings that Liberty lacked technical and managerial capabilities, recklessly disregarded customer welfare, and engaged in wanton misconduct are clearly erroneous and are not supported by substantial evidence in the record.
Judicial review of an administrative agency’s imposition of penalties is limited. " If the penalty meted out is within the limits prescribed by law, the matter lies within the exercise of the [agency’s] discretion and cannot be successfully challenged unless the discretion has been abused." (Internal quotation marks omitted.) Pet v. Dept . of Health Services, 228 Conn. 651, 677, 638 A.2d 6 (1994). " Sentencing is an inherently fact bound inquiry. In an administrative appeal, a reviewing court can do no more, on the factual questions presented, than to examine the record to determine whether the ultimate findings were supported, as the statute requires, by substantial evidence." (Internal quotation marks omitted.) Id., 677-78.
In this case, the penalty was imposed pursuant to General Statutes § 16-41(a), which provides in relevant part: " Any ... electric supplier ... which the authority finds has failed to obey or comply with any such provision of this title ... shall be fined by order of the authority ... not more than ten thousand dollars for each offense ... Each distinct violation of any such provision of this title ... shall be a separate offense ..." In this case, PURA found that each of the 121 bills issued with back-billed charges constituted a separate violation of General Statutes § 16-259a(d). Its penalty of $500 per violation, for a total of $60,500, was unquestionably within the limits prescribed by § 16-41(a). The court thus turns to Liberty’s arguments that PURA’s findings are arbitrary, capricious, an abuse of discretion, and unsupported by substantial evidence.
1
Section 16-245-6 of the Regulations of Connecticut State Agencies provides:
In determining the appropriate sanction for violation of any licensing requirement, the department shall consider the following:
(1) The appropriateness of the sanction or fine to the size of the business or person charged;
(2) The gravity of the violation;
(3) The number of past violations by the person charged;
(4) The good faith effort to achieve compliance;
(5) The proposed programs and procedures to ensure compliance in the future; and
(6) Such other factors deemed appropriate and material to the particular circumstances of the violation.
PURA’s final decision after reconsideration expressly states that PURA " considered all the factors set forth in Conn. Agencies Regs. § 16-245-6." ROR, 140. It does not, however, make specific findings with respect to each of these factors. Liberty claims that the final decision does not address the appropriateness of the assessed civil penalty to the size of Liberty’s business or the fact that Liberty has no past violations.
In response, PURA makes several arguments. First, it argues that it was not required to apply § 16-245-6 " as a matter of law" because § 16-245-6 applies to a sanction for a violation of a " licensing requirement" but the sanction here was imposed for a violation of § 16-259a, the back-billing statute. PURA claims that it merely considered § 16-245-6 as an exercise of discretion. A review of the final decision, however, does not support PURA’s argument. In the final decision, PURA refers to the regulation in a manner which indicates that it applies directly to the facts of the case. ROR, p. 138. PURA later makes a point of stating that it considered " all the factors" set forth in the regulation. ROR, p. 140. In addition, although PURA did not revoke or limit Liberty’s license as a result of the violation it found, the proceeding in which PURA imposed the penalty reopened PURA’s decision on Liberty’s license application. During the first hearing in this case, when explaining why PURA needed more information, PURA’s legal advisor commented that PURA was not only considering a civil penalty, but " looking into whether the license should be renewed ..." ROR, 895. Moreover, one of the factors PURA considered was Liberty’s " lack of technical and managerial capabilities." ROR, 122. Under General Statutes § 16-245(c), PURA " shall not issue a license unless the applicant can demonstrate to the satisfaction of the authority that the applicant has the technical, managerial and financial capability to provide electric generation services ..." Although PURA expressly based the penalty on General Statutes § 16-259a rather than a violation of § 16-245(c), its consideration of Liberty’s " lack of managerial capabilities" had the potential to affect Liberty’s license, whether by revocation or by a future refusal to renew. In these circumstances, the court is not persuaded that PURA had the discretion to disregard § 16-245-6 of the regulations.
In the alternative, PURA argues that if § 16-245-6 of the regulations is directly applicable to the penalty for a violation of General Statutes § 16-259a, nothing in § 16-245-6 requires PURA to " find and determine" each individual factor; it merely requires PURA to consider the factors. It cites, in support of this argument, two sentencing decisions by the Court of Appeals for the Second Circuit. See United States v. Fleming, 397 F.3d 95, 100 (2d Cir. 2005) (" no specific verbal formulations should be prescribed to demonstrate the adequate discharge of the duty to ‘consider’ matters relevant to sentencing"); United States v. Johnson, 501 Fed.Appx. 49, 51 (2d Cir. 2012) (" we will not assume, simply because the sentencing judge did not explicitly cite [the statute] or list each factor therein, that the court failed to take into account the relevant statutory considerations").
In reply, Liberty cites § 16-1-43 of the Regulations of Connecticut State Agencies in support of its argument that PURA was required to make a finding on each factor. Section 16-1-43 provides in relevant part: " The decision shall include all findings of fact and conclusions of law relied upon by the commissioners in arriving at the decision, the findings of fact and law to be separately stated. The findings of fact shall also set forth a concise and explicit statement of the underlying facts supporting the findings of fact, where appropriate." On its face, this regulation does not require PURA to make specific findings as to each factor or piece of evidence it considers in the course of reaching a decision. It does require PURA to state " findings of fact ... relied upon " in reaching its decision. (Emphasis added.)
The court concludes that neither § 16-1-43 nor § 16-245-6 expressly requires PURA to make specific findings as to each of the factors to be considered under § 16-245-6. Absent a specific statutory or regulatory mandate, neither a court nor an administrative agency is required to make express findings as to every statutory factor it considers in reaching a decision. As our Appellate Court has held, " [w]hen a trial court indicates that it has reviewed statutory factors, an appellate court accepts the statement as true, at least in the absence of information to the contrary ... We accord at least as great deference to agencies as to courts; the court is not to substitute its conclusions for those of the board, but it does retain the ultimate obligation to determine whether the administrative action was unreasonable, arbitrary, illegal or an abuse of discretion." (Citation omitted; internal quotation marks omitted.) Ray v. Administrator, Unemployment Compensation Act, 133 Conn.App. 527, 535, 36 A.3d 269 (2012), citing Dombrowski v. Noyes -Dombrowski, 273 Conn. 127, 137, 869 A.2d 164 (2005) (although court must consider all statutory criteria in determining alimony or property division, it need not make explicit reference to criteria it considered or make express findings as to each factor).
PURA’s assertion that it considered the appropriateness of the sanction relative to the size of Liberty’s business is supported by the record. At the September 2, 2015 hearing following the notice of violation, PURA questioned Liberty’s representative about the size of the initial $294,000 penalty in relation to Liberty’s $70 million annual revenue in Connecticut for 2014. ROR, 1009-11, 1018-19. Liberty’s representative responded that there was a " very thin margin" between what Liberty billed the customer and Liberty’s wholesale costs in procuring the power. ROR, 1009-10.
The original penalty of $294,000 was based on PURA’s mistaken finding that 294 bills had been issued with the back-billing rates in violation of § 16-259a and on a penalty of $1,000 per violation. After reconsideration, PURA reduced the penalty for at least two reasons: to account for the mistake of fact- only 121 bills were issued with the back-billed rates- and to reduce the severity of the penalty from $1000 to $500 per violation. The reduction in the severity of the penalty supports PURA’s argument that it considered the size of Liberty’s business in determining the appropriateness of the penalty, even though it did not discuss this factor in its final decision.
Liberty also claims that PURA failed to consider that it had no prior violations, as it was required to do by § 16-245-6(3) of its regulations. As discussed above, however, PURA expressly stated that it considered all the factors required by § 16-245-6, and courts afford substantial deference to such statements by administrative agencies. See Ray v. Administrator, Unemployment Compensation Act, supra, 133 Conn.App. 535. It was not essential that PURA make an express finding that Liberty had no prior violations as long as it considered that factor, as it says it did. Nevertheless, PURA’s failure to make an express finding on this point is noteworthy in light of its reply to Liberty’s claim of error concerning the consideration of a settlement agreement arising out of other customer complaints. The court now turns to that issue.
2
Liberty claims that PURA improperly considered unrelated customer complaints against Liberty that ultimately resulted in a settlement, not a finding of a violation. More specifically, the final decision refers to PURA Docket No. 06-12-07RE06, Application of Liberty Power Holdings, LLC for an Electric Supplier License- Review of Allegations of Consumer Protection Violations (RE06). In RE06, commenced in 2015 while the PURA proceeding at issue in this case was ongoing, PURA issued a notice of violation and assessment of a $13,000 penalty against Liberty for incidents of slamming and separate incidents of misleading and deceptive practices during the enrollment of new customers. On January 29, 2016, PURA’s prosecutorial staff and Liberty reached an agreement to settle RE06, which was approved by PURA’s commissioners on March 3, 2016. The settlement agreement provided in relevant part as follows: " This Settlement Agreement constitutes the settlement of disputed claims. It does not and shall not constitute an admission of liability by Liberty Power or a finding that any violation actually occurred and shall not be used by the Authority or any other person or entity in any other litigation or proceeding to constitute an admission of liability by Liberty Power or a finding that any violation actually occurred." RE06, Final Decision, Appendix A, 2-3.
On April 13, 2016, just weeks after PURA approved the settlement agreement in RE06, PURA adopted a final decision in this matter- albeit one that was subsequently reconsidered. See ROR, 92-108. The April 13, 2016 final decision referred to RE06 in the penultimate paragraph in its discussion of the civil penalty: " The Authority notes Docket No. 06-12-07RE06, Application of Liberty Power Holdings, LLC for an Electric Supplier License- Review of Allegations [of ] Consumer Protection Violations, in which the Authority investigated customer complaints against Liberty and issued a Notice of Violation and Assessment of Civil Penalty against Liberty in an amount of $13,000 for incidents of slamming and separate incidents of misleading and deceptive practices during the enrollment of new customers. That docket resulted in a settlement for a non-tax deductible charitable contribution of $10,000 to Operation Fuel, Inc. and direct reimbursements to certain customers." ROR, 102. That paragraph was immediately followed by the final sentence in the civil penalty section of the final decision: " Having considered all the factors set forth in Conn. Agencies Regs. § 16-245-6, the Authority hereby assesses Liberty a civil penalty of five hundred dollars ($500) for each of the 121 customer bills issued by Eversource, for an aggregate amount of sixty-thousand five hundred ($60,500)." ROR, 102.
In its April 28, 2016 petition for reconsideration, Liberty challenged PURA’s reference to RE06 as improper. ROR, 813. Liberty observed that PURA had not stated the purpose for which it referred to the RE06 settlement agreement. Liberty inferred that PURA had included the reference as part of its consideration of the " number of past violations by person charged, " one of the factors stated in § 16-245-6(5) of the regulations. Liberty asked that PURA remove all references to RE06 in the final decision. PURA declined to do so, observing that § 16-245-6 of its regulations " does not list any factors that the Authority is prohibited from considering in determining an appropriate sanction." ROR, 122-23. It asserted that it had considered " Liberty’s customer complaints history, which includes customer complaints and allegations of slamming and deceptive trade practices that had been filed and resulted in a decision in Docket No. 06-12-07RE06. Even if the investigation resulted in a settlement agreement, the complaints, in fact, had been filed and are still part of Liberty’s licensing record. The Authority is not prohibited from considering Liberty’s licensing record and sees no basis to remove the references to Docket No. 06-12-07RE06 from the Decision." ROR, 123.
In this appeal, PURA makes essentially the same argument, asserting that it " saw the complaints and allegations as reflecting Liberty’s customer complaints history, and factored this knowledge into its weighing of the civil penalty amount." PURA Br., 23-24. But customer complaints are not, in and of themselves, proof of wrongdoing, and PURA does not explain how customer complaints about " slamming and deceptive trade practices" are relevant or material to a civil penalty for improper back-billing. Indeed, the complaints in RE06 were made in 2015, about a year after the back-billing effort.
Notably, in PURA’s original proposed final decision, dated March 9, 2016, it did not refer to RE06 or the customer complaints of slamming that prompted it to open the investigation in RE06. It did, however, conclude that Liberty had violated General Statutes § 16-245o(H)(8) by including taxes in the amounts to be back-billed, when its customer agreements defined " rate" to exclude taxes. In its exceptions to the March 9, 2016, proposed final decision, Liberty successfully argued that it had not been given proper notice that PURA was considering a violation of § 16-245o . ROR, 53-56. PURA deleted the discussion of § 16-245o in its reconsidered decision, concluding that it should examine and assess that issue separately from the back-billing issue. ROR, pp. 124. It added for the first time, however, the reference to RE06, without any explanation of its relevance to the back-billing violation. It had not previously given Liberty notice that it might consider customer complaints about slamming as a basis for a civil penalty for back-billing.
PURA is, of course, entitled to exercise broad discretion in its sentencing determinations. Under § 16-245-6(6) of the regulations, it is entitled to consider " [s]uch other factors deemed appropriate and material to the particular circumstances of the violation." Yet this broad discretion is not limitless. The court concludes that PURA abused its discretion in considering RE06 in determining the amount of the penalty to be imposed for back-billing. PURA had explicitly agreed that the RE06 settlement agreement would not be used in any other proceeding to constitute a finding that any violation had actually occurred. Nevertheless, by pointing out that the RE06 settlement was for a sum ($10,000 non-deductible charitable contribution and customer reimbursements) that neared the sum of the proposed $13,000 penalty in RE06, PURA subtly implied that the agreement reflected a vindication of its notice of violation.
Public policy in Connecticut favors the voluntary settlement of civil disputes. See, e.g., Robinson v. Gailno, 275 Conn. 290, 306, 880 A.2d 127 (2005). PURA’s reliance on the customer complaints underlying a settled dispute undermines that policy by creating a disincentive to settlement. Indeed, any party would reasonably hesitate to settle a matter with a regulatory agency if it knew that the agency would then use the allegations in the settled matter as a basis for imposing a civil penalty in an unrelated matter.
PURA admits that it factored its knowledge of the allegations in RE06 " into its weighing of the civil penalty amount." PURA Br., pp. 23-24. Given that admission, the court cannot conclude that PURA’s improper consideration of the RE06 settlement agreement or the underlying customer complaints was harmless error. It therefore remands the case to PURA to reconsider the penalty without reference to RE06.
3
Liberty contends that no consumer was harmed by its back-billing effort because it canceled the back-bills before payment was due and ultimately decided not to pursue the back-billing. It claims that PURA was required to consider the lack of actual harm to customers in determining the gravity of Liberty’s violation. In support of that argument, Liberty cites two environmental cases, Holbrook v. Cadle Properties of Connecticut, Inc., Superior Court, judicial district of Hartford, Docket No. CV 97-0567429 (December 4, 2000, Rubinow, J.) , and Keeney v. Durable Wire, Inc., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 91-0399750-S (September 7, 1995, Corradino, J.).
Neither Holbrook n or Keeney fully supports Liberty’s argument. Although the court in Holbrook considered actual harm in determining the gravity of an environmental violation, it noted that courts have consistently rejected the argument that no penalty is warranted when no actual harm is proven. Holbrook, supra, n.39. The Keeney court concluded that both actual and potential harm were factors to be considered in assessing a penalty, observing that " [T]he fact that actual harm did not occur does not mean that the violation of a regulation was not grave, it just means that if there had been actual harm a much higher penalty would have been warranted." Keeney v. Durable Wire, Inc., supra .
In its decision on Liberty’s motion for reconsideration, PURA states that it did not consider actual or potential harm to customers in assessing the penalty, but considered the magnitude of some of the bills as evidence of Liberty’s lack of managerial capabilities and disregard for customer welfare. ROR, 121-22. The court concludes that PURA had the discretion to consider the size of the back-bills as evidence of Liberty’s lack of managerial expertise. The court further concludes, moreover, that even if PURA had considered potential harm to consumers in the absence of actual harm to consumers, such consideration would not have been improper. In other words, in determining the gravity of the violation, PURA could properly consider whether Liberty’s actions reflected lack of managerial ability or indifference to the law, and it could also properly consider what effects Liberty’s back-billing effort would have had if it had not been challenged by Eversource and PURA.
Based on testimony by its assistant general counsel, Liberty argues that it absorbed a $500,000 loss when it decided not to pursue back-billing after it canceled the initial back-billing effort. Liberty contends that PURA could not properly consider potential harm without also considering the loss that Liberty absorbed to avoid harm to customers.
It is true that Liberty’s prompt action in canceling the back-bills and its subsequent decision to forego the lost revenue, taken together, could have persuaded a regulator that no penalty, or a lower penalty, was warranted. Nonetheless, a regulator could also have viewed the timing of those decisions as a self-interested effort to end a regulatory proceeding and avoid a penalty, not as evidence of Liberty’s concern for consumer welfare. Questions of a company’s intent are fundamentally questions of fact and hinge on the credibility of the evidence presented. PURA’s decision indicates that it found Liberty’s witnesses and other evidence to be unreliable. ROR, 137. This court may not retry PURA’s determinations of fact. A reviewing court " must take into account contradictory evidence in the record ... but the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence." (Internal quotation marks omitted.) Frank v. Dept . of Children & Families, 312 Conn. 393, 411-12, 94 A.3d 588 (2014).
Consequently, even if PURA considered potential harm but not the absence of actual harm to consumers, it did not abuse its discretion in so doing. The fact that actual harm did not occur does not mean that the violation of General Statutes § 16-259a was not grave; if actual harm had resulted, a higher penalty or other measures to mitigate the harm could have been warranted. See Keeney v. Durable Wire, Inc., supra .
4
Liberty next claims PURA acted arbitrarily, capriciously, and in abuse of its discretion because the penalty it imposed on Liberty was much harsher than penalties it imposed on other entities that committed more egregious violations. The court is not persuaded either by Liberty’s general argument or by the specific examples it proffered. As to the general argument, it is not the place of the court to " second guess the agency’s choice of sanction." Wasfi v. Department of Public Health, 60 Conn.App. 775, 793, 761 A.2d 257 (2000), cert. denied, 255 Conn. 932, 767 A.2d 106 (2001). Rather, courts must determine whether evidence existed that gave the agency the discretion to impose the penalty it chose. As to the specific examples Liberty cites, some involve substantial penalties or alternatives thereto. For instance, in PURA Docket No. 08-02-02, Petition of the Office of Consumer Counsel for DPUC Investigation into CNG Billing Issues, the agency found that CNG had issued " thousands" of bills containing back-billed amounts in violation of General Statutes § 16-259a. Although PURA considered that a penalty was warranted, it took into account the cost and delay of a proceeding to assess a penalty and offered CNG the opportunity to avoid such a proceeding by making a charitable contribution of $150,000 to Operation Fuel. In PURA Docket No. 14-07-15- PURAReview of Choice Energy, Inc., PURA imposed a penalty of $300,000 on Choice Energy, Inc., based on General Statutes § 16-245o(h)(8) and other statutes. It commented that it could have imposed a much higher penalty, but it considered the size of Choice’s Connecticut operations, the gravity of the violation, the number of past violations and Choice’s plan to ensure compliance in the future as the basis for limiting the penalty to approximately six dollars per violation.
Review of the decisions cited by Liberty as examples of PURA’s more lenient treatment of other violators indicate that the decision to assess a penalty, and the amount of the penalty assessed, is highly fact-bound. As our Supreme Court has held, " [s]entencing is an inherently fact-bound inquiry. In an administrative appeal, a reviewing court can do no more, on the factual questions presented, than to examine the record to determine whether the ultimate findings were supported, as the statute requires, by substantial evidence." Pet v. Dept. of Health Services, supra, 228 Conn. 677-78. In this case, as discussed below, substantial evidence supported PURA’s ultimate findings.
5
Liberty argues that PURA’s consideration of Liberty’s " lack of technical and managerial capabilities, reckless disregard for consumers’ welfare, and wanton misconduct" was unsupported by substantial evidence because the only findings relied upon by PURA were (1) that Liberty " intentionally and actually back-billed customers as high as $5,000 and $41,000 and that many of the back-billed customers included churches, schools, state and governmental agencies and non-profit organizations, " and (2) that " [m]ost of the customers Liberty back-billed were small businesses, while many were churches, schools, state and government agencies, and non-profit organizations." Liberty Br., 26-27. Liberty claims that the record does not support a finding that any of the 121 bills actually issued went to any schools or governmental agencies, and that only two religious institutions and one non-profit organization were back-billed. PURA argues that it could have imposed the penalty based on back-bills to churches and non-profit organizations alone.
Liberty reads PURA’s decision too narrowly. PURA was concerned about entities that would have had difficulty in paying large and unanticipated back-bills. Although it specifically mentioned certain types of customers, nothing in its decision indicates that it had no concern for other types of customers, such as small businesses. Nor was its concern unwarranted. An unexpectedly high utility bill may pose a serious challenge to any customer with limited resources, whether that customer is a small business or a non-profit organization.
Indeed, concern for the effect of back-bills on small businesses was one of the factors prompting the enactment of the payment plan requirement in General Statutes § 16-259a(d). See Conn. Joint Standing Committee Hearings, Energy and Technology, Part 1, 1996 Sess., pp. 228-29, remarks of Senator Peters.
Ample evidence supports a finding that Liberty lacked technical and managerial capabilities with respect to the billing issue. The initial error was a flaw in Liberty’s information technology system, which failed to transmit proper rates and dates for billing when fixed rate contracts expired. That flaw existed throughout 2013 and into early 2014 before it was discovered. That such a flaw existed for so long a period of time without being detected supports a finding that Liberty lacked technical abilities.
The evidence also supports a finding that Liberty lacked managerial capabilities. When the billing flaw was discovered and Liberty began to consider back-billing to recoup lost revenue, Liberty’s legal counsel and compliance officer were aware of General Statutes § 16-259a but did not know how it would apply in a consolidated billing arrangement such as Liberty’s billing through Eversource. A Liberty compliance manager, Samantha Greves, contacted a PURA staff member, Michael Coyle, to discuss the issue. On February 27, 2014, Coyle advised Greves by e-mail that he would be glad to talk with her to help develop an approach to resolve the issue, but advised that anything they discussed would " eventually require some kind of submittal on your company’s behalf." ROR, 1030. On February 28, Coyle spoke with Greves and two other Liberty representatives for approximately half an hour. ROR, 1053. On March 5, Coyle e-mailed Greves, commenting that he gathered that Liberty was still developing its proposed approach to the matter, and asking her to let him know when Liberty " makes its filing regarding the billing matter." ROR, 1033. Coyle apparently received no response to that e-mail. On March 11, he again e-mailed Greves to ask how Liberty intended to proceed. ROR, 1034. She responded on the same day that Liberty had just finalized its plan that morning and asked to speak to him that afternoon. ROR, 1035-36. Coyle was unable to respond that day but responded by e-mail the next day, indicating that he was busy with other matters but would try to help. ROR, 1035. Greve sent him an e-mail later that day, detailing the plans that Liberty had developed and advising that the company planned to send out notices the next day and asking for another telephone conference. ROR, 1040. Coyle did not respond to that e-mail, but he e-mailed Greves again on March 31, asking for an update on the billing issue. ROR, 1038. Greves responded that she had previously updated him on March 12 and " as we did not receive a response from you, have begun billing these customers as intended." ROR, 1040. At no time during that period did Liberty make a filing with PURA, as Coyle had advised would be needed. Rather, apparently impatient when it was unable to get an instant response from Coyle, Liberty simply began to implement its plan.
Even as it began to implement its plan, Liberty neglected to discuss the billing issue with Eversource, despite the fact that Eversource would be the entity actually issuing the bills. Liberty drafted a letter to Eversource on March 10, 2014, describing its intention to back-bill for previous months, but because of failed internal communications, it never sent the letter to Eversource. ROR, 552, 886, 1053. On April 1, 2014, when an Eversource account representative noticed the high rates that Liberty was transmitting, he asked to receive whatever notification Liberty was providing to customers so that Eversource’s call center representatives could prepare for customers’ questions. ROR, 873. Liberty forwarded the requested materials on April 2, 2014. ROR, 873. When Eversource’s account representative reviewed Liberty’s materials on April 3, 2014, he realized for the first time that back-billing was involved. He immediately notified Eversource’s legal counsel, who then contacted Liberty’s counsel. ROR, 873-74.
In a hearing on the notice of violation in September 2015, Liberty’s chief information officer admitted that Liberty experienced a breakdown in communications between its regulatory and legal advisors and its operations team. ROR, 1004-05. While Liberty’s regulatory advisors were aware of issues arising under General Statutes § 16-259a, Liberty’s operational team was not informed of the issues and decided to go forward with the back-billing. Liberty offered this explanation of a communications breakdown to counter PURA’s finding that the violation was callous or in reckless disregard of consumer welfare. ROR, 1005-07.
The evidence summarized above supports a finding that Liberty lacked technical capabilities, in that it had an information system problem that resulted in its failure to transmit appropriate billing rates to Eversource for more than a year, and lacked managerial capabilities, in that its regulatory team failed to communicate with its operational team and none of its teams advised Eversource of the billing issues. At least some Liberty personnel were aware that Connecticut’s statute required that a payment plan be provided when back-billing is permissible. Yet Liberty neither developed a payment plan that complied with the statute nor communicated with Eversource, which would be responsible for actually issuing the bills.
Liberty claims that it had always intended to provide payment plans to its customers. Its own documents, however, provide a basis for PURA’s rejection of that claim. As PURA observed, Liberty’s documents all indicate that it expected Eversource to offer a payment plan when a customer requested such a plan. Liberty sent a letter to affected customers directing them to " contact the utility [i.e., Eversource] directly" if they wished to discuss a payment plan. ROR, 327-28. Liberty’s script for its customer service representatives directed them to advise customers to discuss the option of a payment plan with their utility company. ROR, 329-30. As PURA observed, General Statutes § 16-259a(d) expressly requires that " [a]ny ... electric supplier ... that holds a customer financially liable under subsection (a) ... of this section shall establish a payment plan ..." That is, it was Liberty’s responsibility- not Eversource’s- to design a payment plan that was compliant with § 16-259a for each Liberty customer affected by back-billing. Moreover, all of Liberty’s documents demonstrated an intention that Eversource would offer a payment plan only if a customer requested one, while § 16-259a(d) requires that such a plan be established for each customer, without regard to a request.
Finally, the back-billed amounts were significant. As PURA found, the back-bills resulted in several customers being billed more than $5,000 and some being billed as much as $38,000 or more. Liberty argues that some bills were large because some customers consumed large amounts of electricity. But even for customers using smaller amounts of electricity, the back-bills that were issued resulted in electricity supply costs that ranged from two to eight times the customers’ previous monthly charges. For instance, in March 2014, before the back-billing effort, one customer was charged $121.80 for electricity supply services at its prior fixed rate, while the April 2 bill, including the back-billed charges, charged $351.27 for electricity supply services. ROR, 401, 403. The back-bill was nearly three times the prior month’s bill. When the back-billing was cancelled, the customer’s rebill for electricity supply services at the new variable rate was $140.46. ROR, 405. Similarly, another customer’s electricity supply services charge jumped from $366.39 in March 2014, to $2,685.97 on April 1, 2014, with the back-billed charges. The back-bill was more than seven times the customer’s previous monthly bill. That customer’s charge for electricity supply services went down to $695.17 on the April 7, 2014 rebill, when the back-billed charges were removed. ROR, 407, 409, 411. Still another customer’s electricity supply services charge jumped from $474.97 in March 2014, to $3,266.34 on April 1, 2014, with the back-billed charges, and then went down to $1,093.78 in the April 7, 2014 rebill. ROR, 413, 415, 417. On the lower usage side, one customer’s electricity supply charge went from $34.30 on March 6, 2014, to $148.05 on April 3, 2014, with the back-billed charges, and then down to $60.82 on the April 7, 2014 rebill. ROR, 443, 445, 447. On the higher usage side, a customer’s charge for electricity supply services went from $4,744.28 on February 28, 2014, to $32,638.96 on March 31, 2014, with the back-billed amounts included, to $11,749.30 on the April 7, 2014 rebill. ROR, 461, 463, 465. Yet nothing in Liberty’s internal documents, provided to PURA during the proceedings, demonstrated any concern about the effect of such high back-billed amounts on the customers.
Liberty argues that its voluntary decision to forego rebilling, thereby sustaining a loss of more than $500,000 in revenue, refutes PURA’s finding that Liberty disregarded its customers’ interests. That decision was communicated to PURA in Liberty’s motion to close the proceeding, dated April 22, 2014. ROR, 662. In that motion, Liberty stated: " Prior to this proceeding being opened, Liberty suspended its rebilling efforts and made arrangements to cancel the rebills that had been issued thus far. Given the potential impact to customers, who are already experiencing increased pricing pressures due to the Polar Vortex, Liberty has now decided to forego the further rebilling of customers and to absorb the loss that it experienced as a result of the billing error. Thus, in order to avoid the expenditure of unnecessary administrative time and resources, Liberty requests that the Authority close this proceeding as the issues to be addressed are now moot." ROR, 662.
Given the context of Liberty’s decision to forego back-billing, PURA could have construed that decision as a strategic one made in an effort to avoid the costs of proceedings before PURA and penalties that might be imposed. PURA was not bound to accept Liberty’s statement at face value, particularly when Liberty demonstrated that it was willing to bill customers for three months of underbilling in a single month’s bill. With respect to the timing of Liberty’s decision to suspend the back-billing effort, PURA " found Liberty’s own words, whether in the form of testimony or as an exhibit, in the absence of corroborating evidence, to be unreliable, and accordingly, the Authority gave such evidence zero probative value." ROR, 137. The court will not disturb PURA’s credibility determinations.
C
Reimbursement Rates
Liberty also claims that PURA acted arbitrarily, capriciously, and in abuse of its discretion when it ordered Liberty to reimburse Eversource for the costs of its rebilling efforts at the rate provided in the contract between Liberty and Eversource in effect in 2016. It is undisputed that the rebilling work was done in April 2014, when the contract in effect between Liberty and Eversource provided that Liberty would pay an hourly rate of $67.87 for " Supplier Rate Maintenance/Error Correction." ROR, 363. Under the contract in effect between Liberty and Eversource in 2016, the charge for " Supplier Rate Maintenance, Error Correction or Special Data Request" was $72.06. ROR, 141.
Liberty does not dispute its contractual obligation to reimburse Eversource for its April 2014 work to cancel the back-bills and rebill those accounts, but contends that the reimbursement rate should be that under the 2014 contract. An exhibit filed by Eversource on May 1, 2014, asserts that Eversource had $1,628 in " Rebilling/Price Correction Costs, " $302 in " IT related costs, " and fifty-nine hours of non-legal staff time preparing for the first hearing in this matter, which time included " prep, data requests, billing corrections and Hearing participation." ROR, 400. In this appeal, Liberty has not challenged PURA’s authority to order it to reimburse Eversource for staff time spent in April 2014, preparing for the hearing; it has challenged only the reimbursement rate.
PURA’s decision does not state a reason for ordering Liberty to reimburse Eversource at the higher 2016 rate when all the relevant work was done in 2014. PURA’s brief does not offer any justification, but merely argues that the difference between the two rates is de minimis, amounting to $4.19 an hour, or $247.21 in all. PURA Br., 24. In its reply brief, Liberty does not dispute PURA’s assertion that the amount at issue is relatively small; it simply argues that PURA abused its discretion in awarding a rate higher than the contractual rate. Liberty Reply Br., 19.
In the absence of any statement by PURA to explain or justify the decision to use 2016 rates rather than the 2014 rates in effect when the work was done, the court agrees that the decision is arbitrary. In considering whether Liberty’s appeal should be sustained as to this issue, the court has considered PURA’s argument that such a de minimis amount does not affect Liberty’s substantial rights. Even though the amount in question may not be large, the court is unprepared to say that a sum in the hundreds of dollars is " de minimis."
The court has also considered whether there is effective relief it can order in view of the fact that Eversource is not a party to the appeal. Although Liberty did not name Eversource as a party to the appeal, the record indicates that Eversource was duly served with a copy of the appeal by certified mail, and a return receipt acknowledging Eversource’s receipt of service was filed with an affidavit of service by Liberty’s counsel. Docket Entry # 102. The issue of Eversource’s reimbursement rate was expressly identified in paragraphs 134-43 of Liberty’s appeal. Docket Entry # 100.31. In Yellow Cab Company of New London & Groton, Inc. v. Dept . of Transportation, 127 Conn.App. 170, 176-78, 13 A.3d 690, cert. denied, 301 Conn. 908, 19 A.3d 178 (2011), the Appellate Court held that General Statutes § 4-183 does not require a plaintiff to name as a defendant any party other than the agency that rendered the decision. It further concluded that where a person had proper notice of an administrative appeal and an opportunity to seek to be heard, a court is not precluded from entering an order affecting the rights of such a person. Id., 177-78. Because the record in this case reveals that Eversource was given proper notice of the appeal, the fact that it was not named as a party and did not move to intervene does not deprive the court of jurisdiction to enter an order affecting Eversource’s interests. The court sustains Liberty’s appeal as to the issue of the rates to be used in reimbursing Eversource. The case is remanded to PURA with direction to amend its order accordingly.
V
CONCLUSION
For the reasons stated above, PURA’s decision finding a violation of General Statutes § 16-259a is upheld. Liberty’s appeal is dismissed as to that issue.
PURA’s assessment of a civil penalty was affected by its improper consideration of customer complaints that had resulted in a settlement agreement, and Liberty’s appeal is sustained as that element of the penalty alone. The case is remanded to PURA with direction to reconsider the penalty without considering the customer complaints that were at issue in RE06.
PURA’s order that Liberty reimburse Eversource at rates that were not in effect when Eversource performed the work in question is unexplained, arbitrary, and prejudices substantial rights of Liberty. Liberty’s appeal with respect to the issue of reimbursement rates is sustained. The case is remanded to PURA with direction to amend its order to require Liberty to reimburse Eversource at the rates that were in effect in 2014.
In sum, the appeal is dismissed in part and sustained in part. Judgment shall enter in accordance with this decision.