PSC Staff Seek Revocation Of Previously Suspended Supplier's License

September 9, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Maryland Public Service Commission has requested that the Commission revoke Smart One Energy, LLC's natural gas supplier license and direct that the full $250,000 amount of a bond previously provided by Smart One Energy be paid to the Commission

As previously reported by EnergyChoiceMatters.com, the PSC suspended Smart One Energy, LLC's license and issued a fine of $561,000 for, as determined with respect to three complaint cases, not having a signed contract (wet signature) from the customer for customers enrolled telephonically, for transactions which were not exempt from the Maryland Telephone Solicitation Act's wet signature requirement

Staff said, "Effective December 18, 2012, Smart One Energy, LLC ('Smart One'), as Principal, and the Platte River Insurance Company, as Surety, provided the Maryland Public Service Commission (the 'Commission'), as Obligee, with Bond No. 41270416 in the amount of Two Hundred-Fifty Thousand ($250,000) Dollars (the 'Bond') to guarantee and secure Smart One's obligations under Maryland statutes and regulations as a licensed gas supplier in Maryland. By the terms of the Bond, the Bond becomes due if the Commission determines that Smart One is financially insolvent or unable to meet its obligations as a licensed gas supplier in Maryland. In addition, Platte River Insurance Company agreed to permit the Commission to direct that the proceeds of the Bond be paid to satisfy Smart One's financial obligations to the Commission. By correspondence dated August 7, 2019, Platte River Insurance Company gave notice of cancellation of the Bond with an effective date of October 11, 2019."

Staff said, "For the reasons set forth below, Staff requests that the Commission order the forfeiture of the Bond and direct that the proceeds of the Bond in the total amount of $250,000 be paid to the Commission pursuant to its terms as partial satisfaction of Smart One's financial obligations to the Commission. In addition, Staff requests the Commission revoke the license (License No. IR- 2355) of Smart One to do business in Maryland as a supplier of natural gas."

Staff said, "On August 2, 2019, in Order No. 89219, the Commission found that Smart One had violated Maryland law and Commission regulations. In response to those violations, the Commission (1) suspended Smart One's Retail Supplier License; (2) ordered Smart One to pay a civil penalty in the amount of $561,000 within 10 business days of the date of issuance of the order; (3) ordered that Smart One provide refunds to three customers identified in Staffs initial Complaint; (4) ordered that Smart One provide a particular notice to its customers and then provide notice to the Commission by August 9, 2019 of its compliance with that order; and (5) ordered that all of Smart One's existing customers be returned to default utility service for natural gas supply."

Staff said, "On August 14, 2019, the Commission issued a Notice of Default, finding that Smart One had failed to provide the notice required by Order No. 89219 above and was therefore in default of its obligations as a natural gas supplier in Maryland under Md. Code Ann., Public Utilities Article ('PUA') §§ 7-603 and 7-507 and under Code of Maryland Regulations (COMAR) Title 20. On August 22, 2019, the Commission issued a Supplemental Notice of Default, finding that Smart One had failed to pay the above civil penalty and was thus again in default of its obligations as a natural gas supplier in Maryland."

Staff noted that more than 30 days have elapsed since the Commission issued Order No. 89219, and no party or person has sought judicial review.

Staff alleged, "Smart One's has failed to pay the civil penalty issued by the Commission on August 2, 2019. As the Commission noted in its August 22,2019 Supplemental Notice of Default, Smart One's failure to pay the civil penalty imposed by the Commission in Order No. 89219 establishes that Smart One is unable to meet its obligations as a licensed natural gas supplier in Maryland and Smart One is in default under the terms of the Bond. Among other obligations, Smart One has an outstanding obligation of $561,000 owed to the Commission. Smart One has not appealed or otherwise challenged the validity of Order No. 89219 within the time provided under PUA § 3-201 (b), and that Order is now final. Staff recommends therefore that the Commission direct that the Bond shall be paid immediately to the Commission to satisfy in part that unpaid obligation."

Staff alleged, "The Commission has already found that Smart One has violated Maryland laws and regulations. Smart One's failure to comply with the directives in Order No. 89219 is a violation of a Commission order and further demonstrates that Smart One is unwilling or unable to meet its obligations. Under PUA §§ 7-507 and 7-603, the Commission has the authority to revoke a natural gas supplier's license for just cause, which is defined to include, among other things: (iv) committing fraud or engaging in deceptive practices; (v) failing to maintain financial integrity; (vi) violating a Commission regulation or order; ... (viii) violating a provision of this article or any other applicable consumer protection law of the State. In Order No. 89219 and in its subsequent Notices of Default, the Commission has found that Smart One has committed all of these violations. In light of Smart One's continuing failure to comply with the Commission's Orders and Maryland law, the Commission has just cause to direct the forfeiture of Smart One's Bond and to revoke Smart One's license to supply natural gas, and Staff recommends that it do so."

"For the foregoing reasons, the Staff of the Maryland Public Service Commission respectfully requests that the Commission direct that the full $250,000 amount of the Bond be paid to the Commission and, further, that the Commission revoke Smart One's license (License No. IR- 2355) to supply natural gas in Maryland," Staff said

Case 9617

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