PORTLAND, Maine — When Oxford resident Frank Hodson called to see about a lower power rate with his supplier, Electricity Maine, he reportedly learned that the deal came with a catch: an agreement he would not join any class action lawsuits against the company.
Attorneys pursuing just that kind of lawsuit against Electricity Maine and its new Texas-based owners allege the change came in response to the potential multi-million-dollar class action suit and have asked a judge to prevent the company from including those terms while the case is open.
Such agreements require customers to waive their right to pursue any contract disputes before a judge and instead go alone before a third-party arbitrator who would hear and decide the case.
An attorney for Electricity Maine’s new owner, Spark Energy, wrote in an email that the change was not made in response to the suit.
“Electricity Maine’s existing terms of service do contain certain standard provisions that are commonly used in consumer contracts in various consumer facing industries, including an arbitration provision,” Michelle Pector, an attorney representing Spark, wrote. “These provisions were contained in Electricity Maine’s terms of service prior to the filing of the lawsuit.”
The company’s terms of service filed with its latest annual report do not include such terms and neither does a version updated by the company in July. Plaintiffs said the company changed its terms and conditions in an Oct. 24 revision.
They filed the lawsuit Nov. 18 but claimed they first notified Spark and Electricity Maine of their claims in a letter sent Sept. 26.
That lawsuit alleges the company and its leaders deceived customers during late 2012 and early 2013 with promises of savings by switching from the default electricity rate. The plaintiffs estimated damages of $35 million.
The suit followed a Bangor Daily News investigation detailing how companies have marketed their services and how customers would have saved $50 million from 2012 to 2015 by staying with the default standard offer rate. That report found Electricity Maine collected a net premium of about $36 million during that time, including savings of about $2.8 million for customers in 2012.
In their filing Friday, the plaintiffs said the company is adding the arbitration clauses to terms for customers it automatically re-enrolls and for customers who have called to ask about ending service or lowering prices.
In written testimony, Electricity Maine customer Hodson testified that he called the company to renegotiate his terms after learning of the class action lawsuit. He was offered a lower rate, to which he agreed, without realizing the new terms included an arbitration agreement.
For any customers with the company since 2012, the plaintiffs argued that inclusion of an arbitration agreement or class action waiver in new contracts would “interfere with the administration of justice in this case.”
Pector wrote that those allegations “are not accurate” and that the company would file a detailed response in in the federal court case.
Spark took over Electricity Maine after its $28 million purchase closed on Aug. 1.