Lawyers suing Electricity Maine over the company’s billing practices are closing in on asking a judge to allow them to pursue a class-action lawsuit, which would enable them to seek millions of dollars in damages.
Tom Hallett, one of the lawyers representing the two Maine women who have sued the electricity provider, said Monday that lawyers are waiting on a ruling from U.S. District Court in Bangor on a motion to dismiss the case by one of the defendants in the lawsuit. If that is rejected, he said, the lawyers suing should be able to ask for class-action certification soon thereafter.
The lawsuit alleges that the company promised customers that they would pay no more than the “standard offer” price for electricity but then increased the rates sharply after an initial period with lower rates.
The lawsuit was filed on behalf of Katherine Veilleux and Jennifer Chon. But if it’s certified as a class-action suit, lawyers could add to the action tens of thousands of customers they allege were overbilled and seek damages for the entire group.
Hallett said lawyers are likely to seek at least $35 million from the lawsuit.
“That’s what we’ve found so far,” he said, adding that the amount being sought could change as lawyers go through Electricity Maine’s records and seek to expand the number of plaintiffs.
Hallett said that Veilleux and Chon are not commenting on the case.
Electricity Maine was one of the first electric supply companies in Maine to attempt to sign up large numbers of residential electricity customers after the state deregulated the electricity market in the early 2000s. In the first few years after deregulation, which separated electric generating companies from the utilities that deliver power to customers, most electric suppliers went after large industrial companies instead of individual homeowners because it was easier to work out a deal and oversee the contract with a few big customers rather than thousands of smaller accounts.
Electricity Maine’s advertising said its charge for electricity would never exceed the standard offer – the price set by an electric supplier and approved by the Maine Public Utilities Commission for customers who don’t designate a supplier – said Ben Donahue, another one of the lawyers suing Electricity Maine.
“That was clearly unsustainable,” Donahue said, noting that the company spent a lot of money trying to attract customers with advertising and marketing between 2011 and 2014. But after an initial period during which the rates were below the standard offer, the bills jumped, he said.
“They had to raise the rates to recoup their money” that they spent to sign up customers, Donahue said.
That meant exceeding the standard offer rate for electricity, Hallett said.
“They knew that in order to survive, they would have to charge more than the standard offer,” he said.
Donahue said most customers – and Electricity Maine signed up nearly 200,000 in the state, the lawsuit alleges – saw prices increase at least 50 percent above the standard offer price. He said it wasn’t unheard of for customers to see rates double after the initial first few months of lower rates.
Donahue said about 1,000 people have contacted his law office since the lawsuit was filed last fall to follow its status and see if they could join a class-action suit. Donahue said his firm is sending out regular newsletters to those who have contacted the office to keep them up to date on the progress in the case.
The lawsuit names Electricity Maine and its parent company, Provider Power; Spark Holdco, a Texas-based company that bought Electricity Maine in May 2016; and Kevin Dean and Emile Clavet, top executives at Electricity Maine.
Spark Holdco has filed the motion to dismiss the case, saying the plaintiffs have failed to demonstrate that they have an actionable claim under the law. A hearing on that motion is likely to be held this spring.
John. J. Aromando, an attorney for Electricity Maine, said he and the company have no comment on the lawsuit.