November 12, 2018
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Power sellers overcharged Maine customers by $16 million last year

Stock photo | Pexels
Stock photo | Pexels

Maine home power customers could collectively have saved $16 million on electricity last year by going with the standard power rate instead of buying electricity from private suppliers who aggressively market their plans in ways regulators have on multiple occasions found misleading.

The latest figures add to a growing premium that Maine customers have paid to retail electricity suppliers that have most often provided identical mixtures of power generation as the state-regulated standard offer.

From 2012 to 2017, Maine residential customers have spent $95.3 million more with private sellers, a market dominated by Electricity Maine, when compared with the standard offer, according to a Bangor Daily News analysis of federal energy data.

Over that time, Electricity Maine customers could have saved roughly $69 million with the standard offer, the highest amount of any supplier. The company, founded in 2011 by two businessmen from Auburn, was sold to the Texas-based Spark Energy in 2016.

[Electricity company overcharged customers millions, but was still losing money]

In 2017 alone, the higher cost for power from private suppliers was enough to have paid for standard-offer electricity for another 33,280 homes.

Including small business customers, using less than 2,000 kilowatt-hours of power a month, the price paid above the standard offer is as much as $111.5 million, according to a Bangor Daily News analysis of state and federal energy data.

The annual overpayment has dropped as residential and small business customers have slowly switched back to the standard offer. In December, the number of small customers using a private electricity supplier fell to the lowest level since April 2012, at 113,000 customers, according to state figures.

The number continued to fall — to 106,000 — last month. At their peak in the summer of 2013, those electricity suppliers had more than 221,000 customers.

The so-called “competitive electricity providers,” or CEPs, can offer electricity that differs from the standard offer, such as power generated from renewable sources. For that reason, they argue it’s unfair to compare their rates to the standard offer. But since they began targeting the residential market in 2012, most have not.

A PUC analysis completed earlier this year found only one supplier, Clearview Electric, offered a clean energy plan between 2012 and 2016. Since, the state’s largest supplier, Electricity Maine, has also started offering a green plan that offsets a customer’s power use by buying renewable energy credits.

Rich Silkman, CEO of Competitive Energy Services, said his company also offered a green power plan until 2012 through a relationship with Interfaith Power and Light, a group “mobilizing a religious response to global warming.” Silkman said the product was advertised at a premium over the standard offer, supplied by no-emissions generation sources.

Clearview was the second fastest growing supplier in 2017, according to statistics from the U.S. Energy Information Administration.

Think Energy, a subsidiary of the French firm Engie, was the fastest growing and the only company to save its customers money. It began selling to Maine residential customers in 2015 and last year became the fifth-largest in the state.

Ambit Energy, a company that makes its customer base into its sales force, also grew last year, using a sales strategy called multilevel or network marketing. Many of those salespeople advertise to friends and family using Facebook and other social media.

[One company is taking the Mary Kay approach to selling Mainers electricity]

Electricity Maine has steadily shed customers, dropping to about 67,300 customers in 2017, down from about 87,800 the previous year.

Clearview, Ambit and Electricity Maine have all been the subject of consumer complaints over misleading marketing. Electricity Maine faces a pending class-action lawsuit from customers who allege they were overcharged.

[Electricity sellers allegedly posed as CMP auditors to poach customers]

In 2015, regulators reprimanded Clearview Energy and required the company to file quarterly reports of customer complaints, after utility Central Maine Power Co. reported that the company’s salespeople were impersonating utility workers.

Electricity Maine faced the same allegations earlier this year, with regulators threatening to suspend its license to operate in the state. The move prompted the company to curtail its door-to-door marketing program and suspend the contractor that ran those sales efforts. Regulators have not yet issued a decision on the company’s license.

The record of dubious marketing practices and costing Maine customers more prompted lawmakers last year to pass new consumer protections limiting price increases and automatic re-enrollments from such companies.

Maine Focus is a journalism and community engagement initiative at the Bangor Daily News. Questions? Write to mainefocus@bangordailynews.com.

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