Md. PSC Staff, North American Power Agree on $35,000 Payment, Remedial Measures to Resolve Complaint

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February 23, 2011  

Maryland PSC Staff have recommended that North American Power and Gas, LLC make a payment of $35,000 to the Fuel Fund of Central Maryland, Inc., along with undertaking various remedial measures, to resolve Staff's complaint against the retail supplier (Case 9253).

The recommendation was made jointly by Staff and North American Power. Staff's original complaint had suggested a civil penalty of up to $50,000 as well as possible license suspension or revocation (see 1/10).

The proposed $35,000 payment to the fuel fund would be in lieu of a civil penalty. The remedial measures, many of which are already underway (see discussion in our 1/27 story) include revised marketing and enrollment procedures, training, and monthly reports to Staff.

Exhibits attached to the joint recommendation indicate that North American Power is considering conducting direct mail tests in the Duquesne Light territory. North American Power has only recently listed a residential rate for Duquesne Light on PA Power Switch.

North American Power has distributed about 25 million pieces of direct mail in Connecticut and the PPL and PECO territories in Pennsylvania, leading to about 40,000 enrollments from the direct mail campaigns. Total customer count is near 100,000.

Among other things in the jointly recommended Maryland remediation plan, North American Power will maintain its voluntarily cessation of door-to-door marketing. Additionally, North American Power has voluntarily ceased telemarketing activities for 90 days or until a complete review of every aspect of telemarketing can be completed and North American Power's goal of 100% compliance can be reasonably assured, whichever period is longer.

North American Power has now expressly prohibited the use of third-party advertising materials by its independent representatives, and only advertising materials generated by North American Power may be used.

North American Power will also extend the three-day rescission period reflected in its Terms of Service to four days. The remediation plan requires outbound third party verifications for enrollments, and includes the previously reported IP address checks to ensure proper customer enrollments (see our 1/27 story).

North American Power has instituted a zero tolerance policy for failure to comply with its Independent Representative Agreement and Policies and Procedures, including specifically any failure to follow company policies for proper enrollment procedures, and the supplier has terminated a number of independent representatives who had failed to follow these rules.

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