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Retail Supplier Agrees To $315,000 Penalty, Additional Refunds, Extended Rate Cap, Under Revised Settlement
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Electricity Maine, LLC (EME) would pay an administrative penalty of $315,000 and provide an estimated $1 million in additional refunds under an amended settlement with the Consumer Assistance and Safety Division (CASD) Staff of the Maine PUC and, newly joining the pact, the Maine Office of Public Advocate (OPA)
The amended settlement follows a PUC order in June which rejected an original settlement
The settlement is meant to resolve a complaint from CASD against Electricity Maine regarding alleged violations concerning the requirements for renewals and renewal notices, for a set of customers who were moved from a fixed rate to a non-indexed variable rate at renewal. Among other things, CASD alleged that EME failed to provide renewal notices to the relevant customers, and had failed to include the highest and lowest price over the prior 12 months on such notices (EME has averred that, as the non-index variable rate was a new product, EME did not have any historical non-indexed variable rates when it began sending renewal notices to customers in August 2022, and it did not populate the high/low price on the renewal form)
As previously reported, the PUC in rejecting the original settlement had found that the original settlement did not sufficiently ensure that Electricity Maine would not harm customers in the future
While the original settlement included an estimated $5 million in customer refunds, the original settlement did not include a civil penalty
Notably, OPA objected to the prior settlement, raising concerns ultimately shared by the PUC. OPA is a signatory to the amended settlement
The $315,000 penalty under the revised stipulation is meant to address the PUC's concerns that the original settlement did not sufficiently deter EME, or other retail suppliers, from future violations.
The amended settlement also expands the customers eligible for refunds under the settlement, to about 20,000 current and former EME customers, from an earlier total of about 18,000. Customers eligible for refunds will include all customers billed under a non-indexed variable rate. Previously, the pool of eligible customers did not include customers moved to such a rate after June 2023, as there were no allegations of customer notice violations after June 2023
Furthermore, the amount refunded to individual customers will be expanded. Originally, customers were to be refunded the difference between the cost of default service and EME service for their first two bills under the non-index variable rate. The amended settlement expands the period over which customers are eligible for refunds, to now be the first three bills after the customer was renewed onto a non-index variable rate
As a result of these changes, EME estimated its potential refund liability as being up to $6 million. The refund liability had previously been estimated as being up to $5 million under the original settlement
The amended stipulation also provides additional notices to customers regarding their current status on a non-index variable rate
The original settlement included a requirement for EME to issue two notices (via email for customers for whom EME has an email address; otherwise by U.S. mail) to affected customers informing them of their ability to choose default service, an EME fixed-rate plan, or a product from a different retail supplier. Under the notice, the customer may also respond that they wish to remain on the non-index variable rate from EME
As before, these notices shall include a "conspicuous (e.g., bold type) side-by-side comparison" of the default service rate, the EME non-index variable rate (and a statement of whether it is capped), and an offer from EME for a fixed rate
These two notices will now also include a letter from the OPA, on OPA letterhead, listing the current default service rates and stating, "If you are currently paying more than the rates listed below, our office recommends
that you switch to standard offer service or sign up for a new fixed rate contract with
a competitive supplier."
The OPA letter would also include a link to the PUC's electricity shopping rate board
In addition to these two notices, the amended settlement newly provides that an annual notice will also be sent, starting in January 2026 and continuing annually thereafter, to any EME customer on a non-index variable rate. The annual notices, which will include the same content as the initial two notices described above except that the annual notices will not include the OPA letter, will be sent by U.S. mail.
The amended stipulation also revises the rate cap applicable to EME customers on a non-index variable rate who do not take action in response to one of the above-described notices, and who remain on an EME non-index variable rate
The prior stipulation included a rate cap of 14.99 cents/kWh through December 31, 2024 for customers remaining on a non-indexed variable rate
The amended stipulation adds a new rate cap for a subsequent period.
Specifically, the price for EME customers on a non-indexed variable rate will be subject to a rate cap equal to the Standard Offer rate plus 6¢/kWh, for the period January 1, 2025 through June 30, 2026.
As before, neither rate cap will apply to customers affirmatively replying that they wish to remain on the non-index variable rate in response to the above-described notices
The amended settlement includes, without change, other terms of the original settlement
As before, EME agrees to renew customers currently on a fixed rate onto another fixed rate subject to the 20 percent cap imposed by 35-A M.R.S. § 3203(4-B)(C). This limitation on renewals applies
only to the customer's first renewal after the PUC approves the stipulation as final
EME also agreed to various remedial measures concerning its renewal notice practices and customer service
The amended settlement remains subject to adjudication by the PUC
Docket 2023-00024
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September 24, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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