Maine’s largest electricity reseller wants to pony up a $500,000 fine. The state’s utility regulator suggested pulling the plug.
A report last year recommended revoking the license of Electricity Maine, the state’s largest independent electricity supplier, amid a raft of complaints about a deceptive door-to-door sales campaign.
The company also wants to accept a permanent ban on door-to-door sales and other concessions it says will amount to $7.1 million in losses.
Those losses pale in comparison to what the company and nearly 20 other “competitive electricity providers” have cost Maine residential electricity customers in recent years — $150 million since 2012.
Approximately 92,000 Maine households still purchase electricity through one of these independent providers, according to state data from July.
According to an updated analysis of state and federal electricity data, The Maine Monitor found the state’s residential customers would have saved $17.5 million — or about $92 per average household — in 2019 by avoiding suppliers like Electricity Maine and instead taking the standard offer price, negotiated annually by state regulators on behalf of residential customers.
A separate estimate of the cost to small businesses raises that premium to $24.6 million, based on state electricity consumption data and federal pricing data from 2019, the latest year published.
Electricity Maine’s customers alone would have saved $11.3 million in 2019 — or $114 million since 2012 — if they didn’t pick up the phone or respond to a radio ad or sign up at all for the company’s service. The company last year agreed to pay $14 million to settle a potential class-action lawsuit from customers from 2011 through 2019, who alleged they were deceived into signing up.
The cost of electricity
By default, every Maine household signed up for electric service with a major utility gets power through what’s called the standard offer.
Since 2014, the average rate for retail supply has been roughly 30 percent higher than the standard offer.
The difference in rates are fractions of a penny, so it’s easy to miss the significance. But those pennies add up quickly.
In 2015, the retail price was 150 percent of the standard offer. Residential customers would have saved nearly $40 million in that year alone.
The number has steadily declined since 2015, but the rate of that decline has slowed.
That comes as a record number of providers came in below the standard offer price for 2019, though most still charged more. And those charging less had average rates just fractions of a penny below the standard offer, with relatively few customers.
Even with those changes in the market and a general decline in retail power enrollment, Electricity Maine looms large.
Fighting to stay in business
After a scathing report from regulators that documented complaints from all over the state last April, the company and Maine’s consumer advocate began negotiating.
“The (Maine Public Utilities) Commission has never had such an egregious record of customer protection violations by a (competitive electricity provider),” regulators concluded in their report.
The PUC suggested revoking Electricity Maine’s license for a year. Last month, Electricity Maine responded, arguing that suspension of its license is overkill.
The company’s lawyers argued Electricity Maine was not given proper notice of the recommendation or any opportunity to question the unsworn testimony from customer complaints.
They also argued that the regulators’ case violated their due process rights by opening with a demand for Electricity Maine to prove why its license should not be suspended.
The renewed negotiations come after regulators rejected a proposed settlement with the Public Advocate, whose office represents customers in utility cases.
The Public Advocate had initially recommended stiff penalties for Electricity Maine, including the one-year suspension of its license and a penalty of no less than $1 million.
After negotiations, a settlement proposed last fall called for a permanent ban on Electricity Maine’s door-to-door marketing, a $500,000 fine and another $150,000 contribution to a consumer education fund run by the Public Advocate’s office.
Regulators rejected the settlement last month, writing that they could not conclude that allowing Electricity Maine to pay fines and continue to operate would be in the public interest.
“Under the terms of the proposed stipulation, there would be no suspension of Electricity Maine’s license to operate as a (provider), Electricity Maine would pay a significantly smaller administrative penalty, and Electricity Maine would pay an additional $150,000 to (Office of the Public Advocate) to fund customer education,” the commissioners wrote. “Such an arrangement may result in a lack of confidence in the real or perceived motivations of the OPA in the settlement, and thus the public interest would not be served.”
Electricity Maine and the Office of the Public Advocate did not respond to emails seeking comment on the case or the pending settlement.
The commission has yet to schedule a hearing for the revised settlement.