CleanChoice, Altus Power, Generate respond to Minnesota AG's ETF settlement

Minnesota Attorney General Keith Ellison and his office recently secured USD 85,000 in restitution for customers of community solar projects developed by Generate Capital, Altus Power, Global Atlantic Financial Group and Cypress Creek Renewables for “unreasonable” early-termination fees (ETFs) administered by third-party contract administrator CleanChoice Energy.

A subsequent investigation revealed 290 consumers had been charged from USD 250 to USD 500 each in unreasonable ETFs—USD 84,328 in total.

The four community solar operators agreed to a settlement with the attorney general, which included a commitment to no longer enforcing the fees written in current or new contracts with Minnesota customers.

Under Minnesota law, companies may charge consumers for canceling contracts without providing an adequate amount of time for notice, but the amount charged can’t be unreasonable.

The actual damage to companies for early terminations can be calculated by “other means,” or there are other “convenient” ways for a company to obtain a remedy for terminations, according to a press release from the Minnesota Attorney General Office.

CleanChoice, Altus Power, Cypress Creek, Generate Capital and Global Atlantic all participated fully in the Attorney General’s investigation.

“Frankly, we thought it was odd that we were mentioned,” said CleanChoice’s Chief Corporate Development Officer Kate Colarulli in an interview with NPM, adding that “as a third-party contract administrator for several community solar garden operators in Minnesota, CleanChoice Energy is not a party to the settlements recently announced by Attorney General Keith Ellison.”

CleanChoice's role was to administer the customer contracts per the terms agreed upon between each customer and the community solar garden operator—processing payments, sending bills to customers, answering customer care phone calls, added Colarulli . CleanChoice did not establish the terms and conditions of the customer's contracts or the ETFs in the settlements.

“If we were able to establish the terms of these contracts, we would not have included an ETF just like we do not have cancellation fees for our hundreds of thousands of retail energy customers,” Colarulli said. CleanChoice is in the midst of exiting the community solar servicing market due to the recent ownership transition.

Generate Capital and Altus Power also responded to requests for comment.

“Generate does not charge early termination fees to the customers of its community solar projects,” said the Generate spokesperson. “However, one of our former partners mistakenly collected early termination fees on our behalf. When the issue was brought to our attention, we collaborated with the Minnesota Attorney General to send refunds to the few customers who had mistakenly been charged.”

“As one of the pioneers of community solar, Altus Power values our customer relationships and takes pride in delivering the benefits of clean electric energy to our customers and the communities where we operate,” added an Altus spokesperson. “Altus Power does not have a contract with CleanChoice outside of the state of Minnesota.”

Global Atlantic declined to comment on the situation. Cypress Creek did not return calls seeking comment.

Precedent?

It is unlikely other state attorney generals will follow suit, “in part because the fees have either come down, have become less common, or are being prohibited by state regulations,” said a source familiar with the situation.

The fines were “small enough” that it was likely more cost effective for the owners and developers to settle these cases than to fight, added that source.

Alternatively, if the owners or developers wanted to take further legal action, it is possible the courts would have found the fees to be reasonable and not unlawful, said the source.

Illinois is widely considered to be a state with a prevalent community solar program. The Office of Illinois Attorney General Kwame Raoul responded to a request for comment from NPM via email.

“We are not currently involved in any litigation,” a representative said. “We encourage consumers who have concerns about potential scams or unlawful fees to file a complaint on the Attorney General’s website.”

*This story was originally published exclusively for NPM subscribers.

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