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Commissioner To Retail Suppliers: "Clean Up Your Act, Or Things Will Change Dramatically"
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Continuing an ongoing dialogue on retail energy during recent administrative meetings, Maryland PSC Commissioner Anthony O’Donnell fired a "shot across the bow" of retail suppliers, and warned, "Clean up your act, industry, or things will change dramatically."
O’Donnell said that it was a "particular annoyance" that the PSC has been warning retail suppliers who have been acting badly for years, with no improvement
In fact, O’Donnell said that the market has "gotten worse" and that suppliers seem to "thumb their nose" at the PSC and state law
O’Donnell noted "frustration in Annapolis" in this regard
Despite the PSC informing suppliers about a maximum enforcement period, PSC Chairman Jason Stanek reported that supplier complaints are on record pace through February thus far, after January saw a near-record.
Stanek cited, without naming the supplier, a "leading" retail supplier that is responsible for 23 complaints year-to-date. Stanek said that the supplier's identity would be posted publicly as part of the PSC's standard complaint quarterly reporting disclosures.
Stanek reported that his fixed contract with a gas supplier recently expired, and he said that he did not receive a renewal notice. Stanek reported that his supplier rate then went up 325%, with Stanek noting that he did sign the original fixed contract, "a while back."
Stanek said that the matter was resolved "amicably", but said that his experience serves as a warning
Stanek encouraged the Office of People's Counsel to be more proactive in bringing actions against retail energy suppliers and filing more complaints at the PSC against retail suppliers
Discussing the supplier market, Stanek stated, "I am concerned, however, with the People's Counsel. I am concerned that they are not being proactive with respect to partnering with this agency in terms of prosecuting, investigating, and pursuing retail suppliers who have done wrong. In fact, the People's Counsel has not brought a retail supply case to this Commission for several years," with Stanek stating that the last such complaint brought by the People's Counsel was in June 2020
Stanek further stated, "While the People's Counsel has not brought any cases lately, they have been active [and] very litigious in suing this agency when they feel that the agency hasn't gone far enough in prosecuting retail suppliers."
Stanek said that the PSC being in court for such appeals from the Office of People's Counsel (OPC), "uses valuable resources of both the Public Service Commission and the Office of the People's Counsel," and ties up PSC attorneys when the PSC could be using such attorneys to prosecute retail suppliers
Stanek said that the PSC is not charged with protecting and representing the rights of residential ratepayers, but that the PSC is the economic utility regulator that balances the public interest with those of the utilities
Stanek encouraged OPC and other partner agencies to focus on residential customers in the retail market and how customers are affected by suppliers, "who seek to cheat them." Stanek encouraged OPC to bring to the PSC complaints against suppliers.
Stanek said that the PSC is a cooperative agency and looks forward to partnering with any other state agency, or individuals, in addressing retail market issues
As part of a statement in response to Stanek's comments, Maryland People's Counsel David S. Lapp said, "OPC has aggressively pursued litigation against suppliers for almost a decade, only to have our efforts undermined by the Commission’s weak enforcement policies. Our efforts have included appealing Commission decisions that let retail suppliers continue to profit from violating the law."
"By imposing weak penalties over the years, including recent years, the Commission has signaled to retail suppliers that Maryland is open for business to suppliers’ deceptive marketing practices, even where complaints are filed and violations are found. While OPC continues to assess complaint actions, without sufficient remedies that deter violators, those actions carry less weight," Lapp said
Lapp further said that OPC lacks several statutory authorities to police suppliers which the PSC has, such as issuing cease and desist orders.
Lapp's full statement is below.
Stanek commended the efforts of the Energy Supplier Reform Coalition, which is engaged with the PSC in bringing retail supplier marketing and related issues to the PSC, and which works with consumers about retail energy
Stanek also commended the Retail Energy Supply Association for RESA's recent pronouncement that RESA supports the PSC's enforcement efforts
Full statement from Maryland People's Counsel David S. Lapp:
OPC Statement in Response to Chairman Stanek’s Comments at Feb. 22, 2023 Administrative Meeting
"Under Maryland law, the Public Service Commission is the primary and largely exclusive regulatory agency charged with overseeing retail energy suppliers, licensing retail suppliers, revoking or conditioning those licenses, accepting and reviewing required retail supplier and related utility filings, determining whether retail supplier have broken state laws or the Commission’s own regulations, issuing cease and desist orders, ordering rebates for customers harmed by illegal activity, and issuing sanctions when retail suppliers violate those laws.
"Given this significant responsibility of the Commission, it is shocking to hear the Commission’s Chair state that the Commission is 'not charged with protecting and representing the rights of residential ratepayers,' as he said this morning during a public Commission administrative meeting. [YouTube video at 17:07 to 17:23]
"In fact, state law requires the Commission to 'adopt regulations or issue orders' to 'protect consumers . . .from anti-competitive and abusive practices.' State law further imposes numerous other obligations on the Commission with respect to retail suppliers. [See the statute pasted below].
"The Chair’s statement reflects an abdication of his statutory responsibility. Our office -- which has a small fraction of the staff that the Commission does -- has none of these statutory authorities. While the Commission can institute any proceeding to issue orders or regulate suppliers upon its own investigation, OPC simply has rights of a party to a proceeding.
"In fact, OPC has aggressively pursued litigation against suppliers for almost a decade, only to have our efforts undermined by the Commission’s weak enforcement policies. Our efforts have included appealing Commission decisions that let retail suppliers continue to profit from violating the law.
"For example, almost two years ago, the Commission found SmartEnergy Holdings, LLC, serving thousands of Maryland customers, violated Maryland consumer protection laws and Commission regulations. But to this day, because the Commission acquiesced in the supplier’s request to wait to impose remedies until after appeals are finished, the supplier has continued to profit from illegal contracts for almost two years, customers continue to pay exorbitant prices, and customers await refunds for the law violations.
"While we unsuccessfully argued that the Commission should move forward with remedies against the supplier, on appeal we have defended the Commission’s findings of lawbreaking -- contrary to the chair’s statement that we are not cooperating with the Commission. Although we have challenged the Commission’s lax penalties, we have also defended the Commission’s findings of supplier deception in these appeals, contrary to the implication of the Chair’s statements.
"In two more recent cases, in which OPC expended considerable resources -- and continues to do so -- the Commission declined to provide illegally enrolled customers any refunds. In another case, OPC argued that a retail supplier, Sunsea, should have its license revoked. The Commission denied OPC’s request. Now the Commission has reopened an investigation against Sunsea for continuing alleged violations.
"By imposing weak penalties over the years, including recent years, the Commission has signaled to retail suppliers that Maryland is open for business to suppliers’ deceptive marketing practices, even where complaints are filed and violations are found. While OPC continues to assess complaint actions, without sufficient remedies that deter violators, those actions carry less weight.
"The chair apparently misunderstands OPC’s authority. For example, recently, the chair asserted publicly that OPC has 'cease and desist' authority to direct retail suppliers to stop deceptive activities. OPC has no such statutory authority. Rather, the law states that '[t]he Commission may order the electricity supplier to cease adding or soliciting additional customers or to cease serving customers in the State.' (PUA 7-507(n)). In contrast, OPC’s role is confined to 'appearing before the Commission as a party.' Indeed, the Commission has declared that it may refuse to hear a complaint of OPC because it 'simply has no interest' in the complaint.
"Here's the statute that gives the PSC all the authority over retail electricity suppliers that OPC does not have:"
[Link to Public Utilities Article § 7-507 cited by OPC via Findlaw. License required to engage in electricity supplier business]
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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