September 25, 2018
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Maine’s biggest electricity reseller is under the gun in New York

George Danby | BDN
George Danby | BDN
By Darren Fishell, BDN Staff
Updated:

PORTLAND, Maine — The owner of Maine’s largest retail electricity company faces allegations in New York that its salespeople deceptively lured new customers into contracts.

The New York State Department of Public Service last month notified Electricity Maine owner Spark Energy that it is considering barring the company from enrolling new customers and, possibly, from doing business in the state altogether.

But the company claimed in a filing made public Monday that regulators got it wrong in their order, attributing allegations against a different provider to Spark.

“The order’s factual errors appear to be due to significant portions of Spark’s order having been taken verbatim from a recent order to show cause of another [provider], only with Spark’s name substituted in place of the other [provider],” Spark’s regulatory manager Edwin Dearman wrote.

The regulators accused the company of “slamming,” or switching customers to Spark without clear consent. State law in New York and Maine requires providers ensure customers understand terms and conditions of an electricity contract before enrolling those customers.

Out of 35 slamming complaints against Spark from February through December 2016, New York regulators said the company confirmed 17 were invalid enrollments, adding to a list of 45 complaints filed earlier. Spark disputed that the enrollments were invalid and noted that the alleged complaints make up a fraction of its total customer base.

Federal regulatory filings show the company had about 18,000 customers in New York in 2015. Its subsidiary Electricity Maine had about 107,000 in Maine in that year.

“Given the high number of slamming complaints filed with the Department against Spark, it is apparent Spark did not provide customers sufficient information to make them aware that they were agreeing to switch service providers,” New York regulators wrote.

Regulators there initiated the case in January “to seek consequences” against Spark, giving the company until Friday to show why regulators should not bar it from signing up new customers and, separately, why the department should not revoke Spark’s license.

A spokesman for Spark declined comment Monday on the New York case.

New York’s commission has tried in various ways to crack down on retail suppliers after its investigation of the industry uncovered rampant over-charging.

A Bangor Daily News investigation found it’s happening here, too.

Our investigation found that providers, including Electricity Maine, collectively charged Maine residential customers roughly $50 million more for electricity than the default rate, from 2012 to 2015.

Customers said in interviews and to consumer advocates that they are often confused by contract terms and by automatic renewals that can put them into higher rate plans at the end of their contract term.

“Competitive electricity providers” including Electricity Maine sell only electricity supply. They are separate from utilities such as Central Maine Power Co. and Emera Maine, which distribute power, though their charges appear on a customer’s regular utility bill.

If a residential customer does not sign a contract with a retail supplier, they get what’s called the standard offer, a fixed price for electricity set every year through bidding at the Maine Public Utilities Commission.

Lawmakers this session have proposed new consumer protections, including a bill that would cap the prices such companies can charge and another that would require a “yes” from customers before signing them up for another contract. Under current law and regulatory rules, a company can renew a contract if they don’t hear back from customers.

The publicly traded Spark, based in Houston, acquired Electricity Maine last year. Electricity Maine’s Auburn-based founders stand to add up to $4 million to the $28 million sale price if the company hits certain customer acquisition goals, while keeping average prices above the current standard offer.

Spark operates electric and gas utilities in 18 states.

Maine regulators have investigated previous complaints of slamming or misrepresentation regarding such electricity companies, including an early case regarding Electricity Maine’s radio advertisements, before its new owners took over.

A Portland law firm filed a $35 million proposed class-action lawsuit against the company in November on behalf of customers who signed up during that time.

Maine regulators have not taken action or initiated an investigation of Spark since it took over Electricity Maine, according to PUC records. A spokesman for the PUC said the commission’s consumer assistance division has not fielded any such issues.


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