Maine watchdog seeks to have Electricity Maine’s license revoked, says it overcharges

Maine’s consumer advocate is asking the Public Utilities Commission to revoke an electricity supplier’s license to do business in the state, accusing it of overcharging customers.

Public Advocate William Harwood said Electricity Maine, which was founded in Auburn in 2011 and bought by a Houston firm in 2016, “has a long and tortured history in Maine.” Revoking a business license in Maine is “pretty rare” and has not occurred in about 20 years, he said.

“We’ve identified some pretty serious deficiencies,” he said Tuesday in a phone interview. Those deficiencies prompted him to file a petition late last month to revoke Electricity Maine’s license.

In testimony to the PUC, which opened an investigation of Electricity Maine in February, the public advocate’s office said the electricity supplier violated state law and administrative rules by transferring accounts of its customers, without their consent, to a variable rate as high as 40 cents per kilowatt hour. The public advocate called it an “unfair and deceptive” trade practice.

That rate compares with 17.6 cents per kilowatt hour that most Mainers pay through the PUC’s standard offer. Maine allows retail consumers to buy electricity from competitive electricity providers such as Electricity Maine, which must be licensed by the PUC. Electric consumers who are not served by a competitive electricity provider automatically are supplied by the standard offer – a locked rate negotiated by the PUC.

A spokesperson for Spark Energy, the parent company of Electricity Maine, said it does not discuss pending legal or regulatory matters and would not comment on Harwood’s petition or accusations.

Electricity Maine’s Yarmouth lawyer, William D. Hewitt, said in an Oct. 2 filing with the PUC that testimony by the public advocate’s Consumer Assistance and Safety Division does not include “any substantive discussion” of the company’s conduct or how it allegedly violates any applicable legal standard.

“Instead, the CASD appears to be arguing that, within the thousands of pages of documents for which it seeks to lay foundation, there lurks a violation (or violations) of applicable Maine law” by Electricity Maine, he said. “The testimony makes no attempt, however, to identify which of the thousands of pages of documents it relies upon as evidence of an (Electricity Maine) violation, let alone any applicable law that has been allegedly violated.”

Hewitt did not return a phone call Tuesday seeking more details.

A TURBULENT MARKET

The Office of the Public Advocate recommended to the Legislature in February that the 23-year-old market allowing consumers to choose their electricity supplier should be phased out. The market has failed to reduce rates for home customers and advance Maine’s climate goals, the agency said.

The public advocate’s report concluded that phasing out the residential competitive provider market in January 2024 would be the most cost-effective policy. Short of that, policymakers should consider capping comparable competitive provider rates at the standard offer level; prohibit variable rates; scrutinize or eliminate door-to-door marketing; and make the competitive providers pay to help the state fund better education, auditing and enforcement.

Maine is a small market, with 90% of the electricity customers choosing the standard offer, Harwood said Tuesday. The monthly costs for electricity supply are included as a separate line item in the bills sent to customers of Central Maine Power and Versant, which deliver electricity.

The public advocate’s office said that between December 2022 and March 2023, it received more than 125 calls and emails complaining about excessively high bills from Electricity Maine. The number of affected customers is considered proprietary and will not be disclosed, Harwood said. His office estimates that Electricity Maine’s customers overpaid for electric supply in December 2022 and January 2023 by millions of dollars compared to what they would have paid had they been on the standard offer

Some of those monthly bills brought to the public advocate’s attention showed supply charges ranging from $170 to $1,400.

“These bill increases were not easily absorbed by the ratepayers who contacted us, especially seniors on a fixed income,” the public advocate’s office told the PUC. “As one consumer wrote, ‘My husband and I have lived in our home for about 60 years. I just got my January light bill and it went from $274.88 to $771.43 and my Social Security check is $669.00 so you can understand why I am so concerned.”

The public advocate’s office said Electricity Maine said it switched its customers to variable rate contracts from fixed rate contracts because it worried about customers being “locked in” to a high fixed rate for many months. Maine requires competitive electricity providers to notify customers of any contract expiration at least twice, and at least 30 days in advance. One notice must be sent via the U.S. Postal Service and clearly identified as a contract expiration notice.

Electricity Maine, a unit of Spark Energy in Houston, was sued in federal court by customers who alleged fraud and deceptive practices in its marketing to Maine customers. The suit alleged that the company promised customers that they would pay no more than the standard rate for electricity, but then increased prices after initially charging lower rates.

Spark Energy agreed to a $14 million settlement of the suit in 2020.