Public Advocate Seeks Suspension Of Retail Supplier's License, $1 Million Fine

September 4, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Maine Office of the Public Advocate has recommended to the Maine PUC that the PUC suspend Electricity Maine’s retail electric supplier license for a minimum of one year and impose a civil penalty of no less than $1 million on the company

OPA alleged Electricity Maine engaged in the following conduct:

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

• "Some sales agents posed as CMP auditors or claimed to be CMP employees."

• "Other agents said they were from Electricity Maine but promised lower bills if the customer signed up."

• "One agent promised “free service” for a year."

• "Some sales agents promised lower rates, despite the fact that 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, by the PUC’s General Counsel issued an explicit warning letter to Electricity Maine regarding these practices."

• "Despite this warning, Electricity Maine continued its deceptive practices."

"When rogue actors behave as Electricity Maine has, it undermines consumer confidence and trust in the market, diminishing the potential benefits of the market for everyone," Public Advocate Barry Hobbins said. "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."

The OPA further alleged, "Because it happened after the close of the record in this proceeding, the OPA’s brief does not address more recent reports that Electricity Maine has been taking improper actions to collect bills from customers and has been reenrolling customers without following correct procedures."

In a brief, Electricity Maine (EME) said, "EME acknowledges experiencing what EME itself views as an unacceptable level of complaints against door-to-door ('D2D') sales agents working for third party vendors on EME's behalf starting in late 2017 and into 2018."

In a brief, Electricity Maine (EME) said, "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 D2D sales agents alleged to have engaged in serious misconduct ... In response to the issues raised in the Staff letters and Show Cause Order, as well as EME's own internal quality assurance, quality control and compliance initiatives, EME has taken numerous steps to ensure that the Company's D2D marketing program can and will operate in a manner comporting with Maine law."

Electricity Maine said that its steps to address complaint and consumer issues on a pre- and post-sale basis include all of the following:

• "Maintaining a robust vendor onboarding process that includes a vetting call, background checks on the entity, vendor owners and key managers, credit check on the entity, execution of a detailed vendor agreement, and mandatory use of extensive onboarding materials

• "Maintaining a robust agent onboarding process that requires agents to pass background checks, review scripts and training materials and read, understand and sign a Code of Conduct incorporating consumer protections as conditions precedent to undertaking sales activities for EME

• "Maintaining a robust agent onboarding testing process that requires agents to take and pass a software-based training test that also intermittently tests certain subparts of the test content against agent understanding and culminating in a final passing or failing test score

• "Requiring agents to wear in the field a distinctive, branded EME uniform and an informative photo ID badge stating that the agent is 'not part of the local utility'

• "Requiring live, independent third-party verification ('TPV') vendors to verify the validity of submitted D2D sales and to obtain a customer's affirmative choice through oral authorization or other legal means to change to a new provider

• "Maintaining a continuous improvement process for Company policies and practices in Maine based on industry enhancements identified by EME or affiliated companies nationwide

• "Conducting investigations on all internal complaints received from customers with respect to sales agent interactions

• "Investigating and responding promptly and fully to customer complaints forwarded by the Commission, distribution companies or other external sources

• "Cancelling sales, issuing customer refunds and/or offering gift cards or other rewards where appropriate to address customer dissatisfaction or potential noncompliance

• "Implementing outbound post-sale calls to recently-enrolled customers to rate their sales experience, ensure satisfaction and identify any concerns or complaints relating to the sale

• "Using post-sale quality audits conducted by a vendor retained by EME on submitted D2D TPV calls to ensure compliance with TPV requirements and to identify possible use of sales tactics that require follow up review

• "Using periodic compliance audits in field -- that have become more formalized and robust as of late 2018 -- to confirm proper use of uniforms and badges and adherence to Code of Conduct requirements, and with absent agents being immediately deactivated pending review and approval by EME

• "Voluntarily staying, without Commission prompting, all Maine D2D sales activities in February 2018 in order to complete retraining of all agents undertaking D2D sales on a going forward basis

• "Temporarily and then, in certain cases, permanently deactivating individual agents from the sales campaign or, as appropriate, from all Company affiliates following substantial customer service and/or noncompliance allegations

• "Pursuing 'clawback' remedies (as such contractual rights and remedies are secured in vendor agreements signed during vendor onboarding process) against vendors for sales reflecting potential customer dissatisfaction or noncompliance activities

• "Voluntarily and indefinitely staying all D2D sales and, even though not a concern in the Customer Complaint Record, staying all outbound telemarketing sales as well, in Maine as of [confidential language] before the Commission issued its July 24, 2018 show cause order requesting the Company's response to customer service issues identified by the Commission, and remaining in place today, over a year later, and continuing pending final resolution of this investigation

• "Increasing headcount in the Company's vendor oversight group (part of Sales) with the purpose of building out a support team that would have closer ties, periodic checkpoints and accountability with and from third party vendors. The new team includes a vendor onboarding and training manager and an analyst, a long time retail energy professional as the new Senior Director of Mass Markets, and a Field Auditor who travels from site to site shadowing D2D teams with surprise and scheduled visits, attends most onboarding weeks when teams are going through the initial Company or vendor-led training (as each state provides for); performs on the ground training from time to time, and acts as a liaison from vendors back to EME and its affiliates' at headquarters ('HQ') and from HQ back to vendors, with one goal being to help vendors and agents succeed and give them real time feedback on improvements to make for more quality sales techniques;

• "Reorganizing the roles and responsibilities in the Legal Department and hiring additional legal and compliance professionals in the Regulatory and Compliance sections of the Legal Department for greater coverage of oversight to the Company. The additional head count to date includes two new seasoned professionals with the roles of Director of Regulatory Affairs and Compliance Director. The reorganization of the Legal Department was meant to free up senior resources in the Department to allow those leaders to be more strategic in their thinking and in the development of improved processes, programs and policies; and

• "Maintaining an increased top management focus on supervision of and compliance relative to activities of third party vendors, including having the Interim General Counsel and Corporate Secretary of EME and its parent company [] participating personally in all hearings held by the Commission in this proceeding."

Electricity Maine said in a brief, "These voluntary efforts, both individually and collectively, demonstrate EME's commitment to lawfully operating in Maine and establish an overlapping set of robust tools aimed at ensuring to the greatest possible extent that agents retained by EME's vendors operate in a lawful manner or are promptly suspended, investigated and, if appropriate, terminated, with appropriate 'clawbacks' of customer revenues from the vendor ... Accordingly, for the reasons discussed herein, EME requests that the Commission resolve this investigation with no or only limited sanctions to EME beyond the significant self-imposed revenue loss associated with loss of opportunity to sign up additional Maine customers as a result of EME's voluntary stay."

Electricity Maine said in a brief, "EME acknowledges it should have performed better at supervising agents in Maine and will work with commission staff to confirm D2D sales reentry details," but further said that, "EME is confident that these new and enhanced tools [discussed above] at every relevant point -- vendor onboarding, agent onboarding, training, enrollment processing, enrollment verification, post-enrollment check-ins and audits, ongoing agent and vendor reviews and sanctions, and additional staffing and resources within the vendor management/vendor oversight group, and in the Compliance, Legal and Regulatory groups -- will lead to customer satisfaction with sales processes, faster identification of potential problems, and quicker responsive action to correct potential problems. These changes will lead to wins for the Commission's complaint unit, distribution companies, EME, and most importantly, Maine consumers."

The OPA recommended that any penalty funds collected be directed towards an educational campaign to improve consumer understanding of the competitive retail market.

Docket 2010-00256

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