VI. CSD and Commonwealth's Support of the Settlement

CSD states in its motion that the settlement deals with the issue of notice as a prerequisite for supplemental billing. Commonwealth admits that the 159 instances of supplemental billing documented by CSD were violations of Section 394.5(a). A fine of $500 for each of the 159 documented instances of supplemental billing is imposed. In light of Commonwealth's agreement to provide restitution, CSD believes that the statutory $500 minimum fine for each of the 159 instances of supplemental billing is reasonable.

CSD represents that the settlement deals with the issue of alleged misrepresentation of energy savings. CSD found that many of the representations to the public of energy savings were vague enough to be meaningless. Some of the representations might have been accurate for some customers and not for others. CSD believes that the issue is moot because Commonwealth corrected its advertising early in its development. Further, CSD believes that it is not clear that its earlier advertising was misleading.

CSD believes that the settlement helps prevent future supplemental billings without prior notice. Given that Commonwealth admits that the 159 instances of supplemental billing documented by CSD were in violation of Section 394.5(a), it cannot claim in the future that supplemental billing without prior notice is lawful.

CSD believes that the settlement deals with the misrepresentations on Commonwealth's application for registration. The settlement provides for the maximum statutory fines for the violations. Commonwealth has already filed a re-registration application to correct the flaws in its original registration. In addition, Bloom and Mensch, the management team under whom the early advertising took place, will not have any further significant involvement with Commonwealth without the Commission's approval. Mensch was president of Commonwealth after Bloom. CSD believes that Mensch knew of Bloom's prior sanctions, and condoned the failure to report the sanctions and the supplemental billing.

CSD points out that the settlement does not require the Commission to administer the restitution to affected customers, but does provide for an audit of the restitution process. In addition, any undelivered restitution will be sent to the State Controller as unclaimed property subject to escheat.

CSD found that Commonwealth's customer service operations are now properly staffed and equipped.

CSD and Commonwealth state in their respective motions that a careful review of the settlement and the record in this proceeding supports a finding that the settlement is reasonable in light of the whole record, consistent with law, and in the public interest.