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People's Counsel: 90% Of Retail Supplier's Customers Paid More Than Utility (Average $1,000 Per Customer)

OPC Seeks Refunds

October 31, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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The Maryland Office of People's Counsel has sought a Maryland PSC order requiring, if the PSC has such authority, that Smart One Energy, LLC (SOE) issue refunds to any customer who paid in excess of the default service rate

As previously reported by, the PSC previously ordered that all of the customers of Smart One Energy, LLC shall be returned to default service. The PSC's order arose from violations with respect to three specific customers, namely, 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 (see's prior story for requirements under the Maryland Telephone Solicitation Act).

The PSC later revoked SOE's license when a fine of $561,000 related to the violations was not paid.

While the PSC's actions related to three customers, prior counsel for SOE previously said during a hearing that the company's other Maryland customers, which was about 10,000 at the time of a hearing this summer, were similarly situated (e.g. the company did not have a signed contract for a telephonic enrollment)

OPC is seeking relief for such customers

OPC said that, "On August 2, 2019, the Public Service Commission of Maryland ('the Commission') issued Order No. 89219 concerning Smart One Energy, LLC’s ('SOE' or 'the Company') retail gas supply business operations in Maryland. In the Order, the Commission found that SOE’s sales and contracting processes violated Maryland law and Commission regulations."

OPC said that, "The Commission further found that the circumstances (failure to use a written contract and obtain a wet signature, failure to provide a Contract Summary, and engaging in deceptive solicitations) leading to the violations 'were part of an unlawful scheme by SOE to scam' the three utility customers cited in Commission Staff’s complaint against the company. The Commission noted that, according to SOE’s counsel, SOE’s approximately 10,000 current customers were similarly situated, having been charged by the company without having a contract or having been provided a contract summary. Additionally, SOE has produced no evidence that it has adhered to Maryland law and Commission regulations when enrolling the Company’s approximately 7,000 former (at the time Order No. 89219 was issued) customers."

OPC noted that, "In Order No. 89219 the Commission also stated that it would 'address the question of refunds generally in a subsequent order.' To date, the Commission has not addressed this issue and has not calculated or ordered refunds to SOE’s approximately 17,000 defrauded now-former customers."

OPC said that based on information OPC received from Washington Gas Light:

• 16,387 of SOE’s approximately 17,000 customers were enrolled through WGL.

• From the date SOE was granted a retail gas supplier license by the Commission (September 21, 2011) until the en masse drop ordered by the Commission on August 2, 2019, 14,848 SOE customers collectively had paid $14,186,409.81 more for gas supply than they would have paid had they simply remained on WGL’s default service. This represents an average overpayment of $955.44 for those consumers.

• "Over the same period of time, 1,539, or 0.09% [sic], of SOE’s WGL enrollees actually saved money or broke even. The total amount saved was $4,332.76 which represents an average savings of $2.82 for those consumers."

"Considering the fact that each of SOE’s customers was defrauded in the same manner, $14,185,086.29 is the refund or re-rate amount that should be ordered by the Commission, as was done for the three consumers cited in Commission Staff’s complaint," OPC said. This amount subtracts $1,323.52 from the $14,186,409.81 total overcharge. OPC said that $1,323.52 represents the overcharge owed by SOE to the three customers cited in Commission Staff’s complaint, whose accounts are also included in the detailed information provided by WGL, but for whom the Commission has already ordered refunds in Order No. 89219.

"The remainder of SOE’s approximately 17,000 customers (approximately 613 customers) were enrolled through Baltimore Gas and Electric Company ('BGE'). OPC has propounded a data request to BGE seeking similar information as that requested from and provided by WGL," OPC said

"For the foregoing reasons, OPC requests that the Commission determine whether it has authority to take action to order refunds despite the revocation of the Company’s license, and if so, order refunds, in the appropriates amounts, to SOE’s defrauded former customers pursuant to the Commission’s authority under PUA 7-507(k) and COMAR," OPC said

"[T]he detailed information provided by WGL includes 1,539 short-term SOE customers who either broke even or saved small amounts. No refunds are necessary for those few customers, or for the three customers cited in Commission Staff’s complaint, whose accounts are also included in the detailed information provided by WGL, and for whom the Commission previously ordered refunds in Order No. 89219," OPC said

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