The Maine Public Advocate’s Office is asking state regulators to fine Electricity Maine at least $1 million and suspend its operating license for a year, saying the energy provider engaged in fraudulent and deceptive marketing practices.

Maine Public Advocate Barry Hobbins said, “When rogue actors behave as Electricity Maine has, it undermines consumer confidence and trust in the market.” Joe Phelan/Kennebec Journal

Electricity Maine is one of the dozens of energy companies in Maine that offer to sell electricity to customers directly. About 80 percent of Maine households choose to buy their electricity through the state’s negotiated “standard offer” rather than through a competitive, retail energy provider.

In a brief filed Friday with the Public Utilities Commission, the Public Advocate’s Office made several allegations against Electricity Maine, including:

• During a “door-to-door” marketing campaign conducted from November 2017 through July 2018, it received over 70 complaints about fraudulent or deceptive marketing tactics perpetrated by Electricity Maine’s sales agents.

• Some sales agents posed as Central Maine Power auditors or claimed to be CMP employees.

• Other agents said they were from Electricity Maine and promised lower bills if the customer signed up. One agent promised “free service” for a year.

• Some sales agents promised lower rates, even though Electricity Maine’s rates were higher than other available options, including the standard offer.

• The campaign targeted vulnerable populations, including the elderly.

In March 2018, the public advocate says, the PUC’s general counsel issued an explicit warning letter to Electricity Maine regarding these practices, but the practices continued.

“When rogue actors behave as Electricity Maine has,” said Barry Hobbins, the public advocate, “it undermines consumer confidence and trust in the market, diminishing the potential benefits of the market for everyone. The remedies sought by the OPA are intended to restore confidence in the integrity of the market to ensure that these benefits continue to be available.”

Contacted for a reaction, C. Alexis Keene, the interim general counsel and corporate secretary for Spark Energy Inc., Electricity Maine’s corporate parent, said the company doesn’t comment on ongoing regulatory matters.

But in a filing last Friday at the PUC, Electricity Maine said it had taken numerous steps to make sure its direct marketing program was in compliance with Maine law.

“EME takes seriously its obligations to operate in a customer-friendly, compliant manner that goes well beyond merely suspending, retraining and sending back out into the field … sales agents alleged to have engaged in serious misconduct,” the company wrote.

A formal reply in the case is due Sept. 10. The PUC staff then will issue an examiners report, which makes a final recommendation. The three PUC commissioners would then decide the case, likely in October.

Electricity Maine was started in 2010 and was sold to Spark Energy in 2016. Spark’s retail electricity division reported a gross profit of $63.6 million through the first six months of this year, according to its most recent Securities and Exchange Commission earnings statement. That compares with $52.4 million in the first six months of 2018.

Maine adopted a competitive retail market for electricity for all customers in 2000 under the belief that markets generally act to lower prices and improve service. But that system has largely failed to meet its promises, especially for residential customers.

In an interview Tuesday, Hobbins said the ongoing problems with Electricity Maine point out the need for the Legislature to re-examine the system and see if changes are needed.

“This demonstrates how the competitive provider system is failing,” he said. “The whole system has to be looked at.”

Maine’s competitive provider market has failed to provide the kind of real-time pricing for home customers that the PUC envisioned when it approved CMP’s conversion to smart meters. The resulting shortfalls were noted in a Maine Sunday Telegram investigation of CMP’s billing system, which found that millions of dollars in promised savings never happened.

Another failing is that competitive providers have largely been unable to beat the price of the state-run standard offer, which receives bids for the lowest rates for electricity supply. That shortcoming was documented last year by the Bangor Daily News, which found Maine customers were overcharged $16 million by choosing suppliers such as Electricity Maine over the standard offer.

In a related matter, some former customers are seeking penalties from Electricity Maine in federal court as part of a class-action lawsuit alleging that bills went up, instead of down.

The Public Advocate’s Office is recommending that any fines that are collected be directed to an educational campaign to improve consumer understanding of the competitive retail market.