May 23, 2013

PUC probing Electricity Maine for possible false ads

Did the company's ads give the impression it is the state's cheapest provider? Regulators ask for answers.

By Tux Turkel
Staff Writer

Maine's Public Utilities Commission is trying to determine whether the state's largest competitive electricity provider has used false or misleading advertising to attract and keep customers.

Among other things, the agency is looking into whether Electricity Maine LLC developed radio ads that gave the impression that its rates for homes and small businesses are lower than the state-sponsored standard offer. The Auburn-based company has more than 185,000 customers in Maine and 55,000 in New Hampshire.

The PUC action is a request for information, not a formal investigation. Electricity Maine is preparing its response.

In an interview with the Portland Press Herald, the company's president, Kevin Dean, said he's no longer trying to beat the standard offer. Rather, he said, Electricity Maine is pitching stable, longer-term rates from a local company that supports the community.

"We're going to offer you a fair deal, year in and year out, and we're going to give back," he said.

The PUC's inquiry, and Dean's remarks, show how Maine's competitive energy market for home customers is evolving. At least seven companies are licensed by the PUC as competitive energy providers for homes and small businesses, each with deals and offers that can change at any time.

That level of competition is a relatively new development for electricity in Maine. As with long-distance and mobile phone service, consumers must understand what they're buying and stay on top of changes, said Eric Bryant, senior counsel in the Maine Public Advocate's Office.

"People have to be aware that this market isn't regulated," he said. "People have to take care to protect themselves, if they dip into this market."

Bryant's office maintains a Web page that helps consumers compare electricity providers, at:

Electricity Maine grew by offering rates that undercut the standard offer for Central Maine Power Co. home customers. For instance, last fall, Electricity Maine offered a rate that was 5 percent below the standard offer, which was 7.4 cents per kilowatt hour. A typical home customer could expect to save about $1.50 a month on the average energy charge of $38.55.

The standard offer, which is approved by the PUC, changes annually in March. The rate can go up or down, depending on bids from wholesale power generators. On March 1 of this year, the rate went down by about 8 percent for CMP home customers, to about 6.8 cents. That new rate is in effect until next March.

Many Mainers are dipping into the competitive market, primarily to save money. About four in 10 CMP home customers are getting their electricity from a source other than the standard offer, compared with fewer than one in 10 just two years ago.

Maine's electricity industry has been deregulated for 13 years, separating energy supply from delivery services. Large businesses have long been shopping around for power supply. But it wasn't until last year that competition heated up for home customers, a market pioneered in 2011 by Electricity Maine.

Around the time the standard offer was due to drop, a PUC staff member heard radio ads for Electricity Maine. That triggered the inquiry. A key concern to the agency is reflected in a written question to Dean, from Mitchell Tannenbaum, the PUC's general counsel.

Tannenbaum wrote: "Please confirm that it is Electricity Maine's position that its radio promotions during the period of February 1, 2013, to March 31, 2013 (except for possible mistakes by the radio station) did not include a statement to the effect that if your power bill says standard offer, you're paying too much."

Dean is still preparing his written response. He told the Press Herald that he advertises on about 30 radio stations. The ads include "talking points" for disc jockeys and five-second "blinks," such as: "Electricity Maine offers the power to save and is Maine's best choice for a power provider!"

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