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Volunteer Energy Urges Md. Approval of Utility Choice International Broker Applications

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October 21, 2010

The Maryland PSC's delay of Utility Choice International's licenses as a natural gas and electric broker is, "causing Volunteer [Energy] a great deal of harm," in its entry into the Maryland market, Volunteer said in a letter to the PSC.  Volunteer uses Utility Choice International to market its supply.

As only noted by Matters (9/30/10), the Commission has taken Utility Choice International's applications under advisement, and has issued requests for additional data, to which Utility Choice International has already responded.  The applications do not yet appear on any of the Commission's draft agendas for further consideration through November 10 (the latest agenda posted), though the Commission could issue a letter order at any time after having already heard the matter once at an earlier meeting.

Though PSC Staff have recommended approval of the applications, Staff raised the issue of whether the individual agents under multi-level or direct marketing approaches, which Utility Choice International utilizes, should be individually licensed, apart from the company for whom they market.

Volunteer supports a generic Commission proceeding to review the independent representative marketing model, but said that, "it seems inappropriate to withhold licensing of UCI without any reason to believe that consumers may be subject to harmful activity."

Volunteer noted that the Commission recently granted supplier licenses to Ambit Energy, North American Power, and Viridian Energy, all of which rely heavily on a multi-level or direct marketing approach.  Volunteer further noted that the application of Stream Energy for an electric supplier license is on the Commission's November 10 administrative meeting agenda.

"Preventing UCI from operating in Maryland effectively precludes Volunteer Energy from operating in Maryland.  Volunteer Energy is no different from any of those recently licensed in Maryland that only market to customers through multi-level marketing," Volunteer said.

"Our company's plan to launch into Maryland with a licensed UCI as our marketer was, in part, based on the observation that the Commission approved licenses for three other suppliers using the identical sales approach.  A significant investment was made to enter the market in time to begin marketing prior to the 2010-11 heating season.  Return from this investment cannot be realized for an additional twelve months if UCI is unable to launch its marketing activities very soon," Volunteer added.

"We are not aware of any consumer harm associated with the type of customer acquisition used by UCI, even though this method has been used extensively in other markets.  Volunteer Energy has utilized multi-level marketing for the past three years and, by all accounts, the system has worked as it should," Volunteer said.

   
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