The Maine Public Utilities Commission voted unanimously Thursday to open an investigation into operations of Electricity Maine, a competitive electricity supplier that has been sharply criticized for customer dissatisfaction and high rate increases.
Dozens of consumers have complained to the PUC about rates more than doubling after fixed-rate contracts with Electricity Maine expired, the commission said. PUC Chairman Philip L. Bartlett II said the customers reported that they either didn’t receive a notice of the expiration and rate hike or didn’t remember getting one.
Maine requires competitive electricity providers to notify customers of any contract expiration at least twice, at least 30 days in advance. One of the notices must be sent via the U.S. Postal Service and clearly identified as a contract expiration notice.
“Maine consumers deserve to be treated fairly,” Commissioner Randall D. Davis said. Bartlett and the third commissioner, Patrick Scully, said they were convinced to support an investigation by the number of complaints.
Scully said that an electric supply contract with a fixed rate that shifts to a variable rate without a clear notice “provides a real moment of risk for consumers.”
“Given the nature of the complaints that have been filed, I think it’s very appropriate for us to investigate to determine whether or not Electricity Maine complied with our requirements,” he said.
PRICE JUMPS CAUSE CONCERN
Rates in Maine have jumped this winter for the standard offer, the default electricity service used by most customers. Maine customers also can opt to buy their electricity from suppliers through a competitive market. In either case, the electricity is then actually delivered by Central Maine Power, Versant Power or local utilities.
The high supply prices stem largely from an increase in the price of natural gas, which fuels much of New England’s electric generation.
The PUC said it has received 234 calls about competitive electricity suppliers since November – and 166 of those, or nearly three-quarters, concerned Electricity Maine. A PUC spokeswoman said most of the calls about Electricity Maine concerned the expiration of fixed-rate contracts in November and the move of those customers to variable-rate contracts with higher monthly costs.
Competitive electricity suppliers are governed by PUC rules on how and when they have to notify customers about rate changes, but many consumers still are caught off guard when the rates increase. Customers often have a set time to respond to notices about the expiration of fixed-rate contracts and if they fail to do so, are often moved to a variable rate plan in which the price can change monthly.
Electricity Maine, which is a subsidiary of Houston-based Spark Energy, said in a statement Wednesday that prices in global energy markets are spiking, increasing its costs. That has led to high winter rates for customers who are on month-to-month contracts, the company said.
The volatility in the markets appears to be easing, and Spark said it expects high rates for month-to-month contracts to come down.
Electricity Maine was sued in federal court by customers who alleged fraud and deceptive practices in their 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.
Electricity Maine’s parent company agreed to a $14 million settlement of the suit in 2020.
Maine Public Advocate William Harwood has said many customers are shocked by sudden increases in the price of electricity. They may have been attracted by an initial lower rate, he said, and didn’t read disclosure agreements that allow the supplier to increase rates after that initial period has run its course.
Harwood’s office is recommending that the Legislature phase out the option to choose among electricity suppliers, beginning next year. A recent study found that households that chose a competitive supplier paid about 70% more than the standard offer and consumers are often confused about their options on electricity suppliers.
The PUC didn’t elaborate on what it will look at when it begins its review of Electricity Maine and did not set a schedule for the inquiry.
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