PSC Staff Seek Show Cause Order Against Retail Supplier -- EnergyChoiceMatters.com

PSC Staff Seek Show Cause Order Against Retail Supplier

January 25, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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The Staff of the Public Service Commission of Maryland filed a complaint seeking that the Commission, "issue an order directing that SFE Energy Maryland, Inc., d/b/a SFE or SFE Energy ('SFE') show cause why its license to provide electricity and electricity supply services should not be suspended or revoked or, in the alternative, why the Company should not be precluded from soliciting additional customers and why SFE should not be subject to a civil penalty under Sections 7-507 and 13-201 of the Public Utilities Article ('PUA') of the Annotated Coded of Maryland for committing fraud and engaging in deceptive practices, for failing to comply with the Commission’s customer protection regulations contained in COMAR 20 Subtitles 53 and 59, and for other violations of Maryland law cited herein."

Staff alleged, "Between January 1, 2020 and September 30, 2022, the Commission’s Consumer Affairs Division ('CAD') received 136 customer complaints concerning SFE. After investigation and in accordance with CAD’s complaint procedures, CAD found in favor of the customer in 56 of these cases."

Staff alleged, "In its review of CAD complaints, Staff found six violations of COMAR 20.53.07.07A(2) and 20.59.07.07A(2), which states 'a[n electric or gas] supplier may not engage in marketing or trade practice that is unfair false, misleading or deceptive.'"

Staff alleged, "As an example, on March 14, 2022, CAD opened Complaint No. 00035740 in which the customer had an invalid supplier contract because a key element was missing from the Contract Summary. In addition, CAD noted the SFE agent’s deceptive enrollment practice alleged by the customer. The customer stated that he was solicited by an SFE door-to-door salesman stating he was from BGE and that he was there to help the customer switch to a renewable energy source that would also decrease energy costs significantly. CAD found that SFE’s agent misrepresented the nature of their relationship to the customer’s utility, engaged in unfair, false, misleading, or deceptive marketing regarding the agent’s relationship with the customer’s utility and the indication that electric costs would decrease. CAD found five additional instances of unfair, false, misleading, or deceptive practices of SFE."

Staff alleged, "Staff found one violation of COMAR 20.59.10.05B, which states that an agent shall identify the supplier they represent and state that they are not working for and are independent of the customer’s local distribution company. On April 8, 2020, CAD opened Complaint No. 00026007 in which a customer was solicited by an SFE agent claiming to be hired by BGE to 'retain their customers.' ... As a result of the misrepresentation and the unclear rates, SFE rerated/reimbursed the customer the difference between what was paid to SFE and what would have been paid to BGE for the period of the contract."

Staff alleged, "In another ten cases, CAD a found violations of subsection B(1) which provides 'at the time of completion of the contracting process, a supplier shall provide the customer a copy of the executed contract and completed Contract Summary on the form provided by the Commission.' As an example, on April 27, 2022, CAD opened Complaint No. 0035986 in which the customer was enrolled without receiving a copy of the contract, and SFE was only able to produce a Contract Summary with a signature at the bottom. CAD determined that SFE was required to provide a copy of the executed contract as well as the completed Contract Summary in order to constitute a valid enrollment."

Staff alleged various instances in which enrollments were not made by the customer of record

Staff alleged, "On October 26, 2021, CAD opened Complaint No. 00034853 in which the customer was solicited via telephone for enrollment. Following the telephone solicitation, the customer was mailed a copy of the electricity agreement details, the terms and conditions, and the Contract Summary. Pursuant to MD. Com. L. §14-2203, a contract made pursuant to a telephone solicitation must be in writing and signed by the customer. CAD found that SFE neglected to obtain the required wet signature making enrollment invalid."

Staff alleged, "The actions of SFE and its agents in ... 56 cases resulted in invalid and illegal customer enrollments or 'slamming.'"

Staff alleged, "The nature and volume of SFE’s violations of Maryland’s consumer laws warrant the Commission to levy penalties against SFE in accordance with its discretion and Maryland law."

Staff did not propose any specific penalties.

Case No. 9690

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