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PSC Orders Retail Supplier To Issue Refunds To Customers

March 9, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

The Maryland PSC ordered Smart One Energy, LLC to issue refunds to its former customers

As previously reported, the PSC previously revoked the supplier license of Smart One Energy, LLC.

The ordering of refunds by the PSC is notable given that the case centered on only three specific customer complaints, though the PSC said that, in adjudicating the matter in its prior order, "SOE’s violations of law have been established and provide good cause to impose a remedy under PUA § 7-507(k)." See our prior stories for the violations found by the PSC, which included not having a signed contract for a non-exempt telephonic sale

As such, the PSC said that the only remaining substantive issue is whether the Commission has a sufficient factual basis to order refunds to specific customers

The PSC said that, "Through data requests to Maryland utilities, OPC has identified over 17,000 Maryland customers formerly enrolled with SOE and thus affected by SOE’s unlawful customer enrollment practices—practices that SOE admitted affected all of its customers in Maryland from the date SOE acquired its supplier license to the date its license was suspended by the Commission.8 OPC and the utilities documented that nearly all of SOE’s customers were located within the service territory of Washington Gas Light Company ('WGL'), with the remainder in Baltimore Gas and Electric Company’s ('BGE') service territory. OPC attached to its filings confidential copies of records received from WGL and BGE, identifying affected customers and the respective amounts of the requested refunds."

The PSC said that, "Based on the records obtained from WGL, OPC calculated that '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.' The records also reflect that an additional 1,539 of SOE’s WGL enrollees saved money or broke even, with the total amount saved among those customers being $4,332.76. Based on the records obtained from BGE, reflecting that 767 SOE customers were enrolled through BGE, OPC calculated that '754 SOE enrollees collectively paid $137,120.11 more for gas supply than they would have paid had they simply remained on BGE’s default service.' BGE’s records also reflect that three SOE enrollees saved a total of $26.02, with an additional 10 customers breaking even."

"The Commission finds that the uncontroverted evidence demonstrates that SOE unlawfully benefited to the detriment of its affected customers, and this evidence supports OPC’s request for refunds. Consistent with the Commission’s prior Order in this case, Order No. 89219 -- in which the Commission ordered SOE to provide refunds for three identified customers equal to 'any amount it charged those customers above the applicable utility default service rates, calculated as a net difference over the period those customers were receiving supply from SOE' -- OPC has for each SOE customer presented evidence of both SOE and utility supply charges and the amount of usage by the customer for each billing period, and based on that data calculated a net difference between what each customer paid SOE and what they would have paid if they had remained on utility standard offer service," the PSC said

"OPC has not, however, provided evidence of whether any of those customers were taking service from another retail supplier at the time that SOE wrongfully enrolled them, and therefore there are questions regarding the level of refund that have not been resolved," the PSC said

"Accordingly, SOE is hereby directed within 10 business days of the date of this Order, less any refunds already paid, to pay refunds for the customers identified in OPC’s confidential attachments any amount it charged those customers above the applicable utility default service rates or, where applicable, the rate (or rates) that the customer would have been charged under a prior contract between the customer and a retail supplier but for the unlawful enrollment, calculated as a net difference over the period those customers were receiving natural gas supply service from SOE. Because the violations by SOE identified in Order No. 89219 -- including enrolling customers without valid signed contracts -- constitute unauthorized enrollments, refunds shall follow the process laid out in COMAR 20.59.07.05C(2)(a) where applicable. SOE is further directed to submit a compliance filing within 30 days of this Order providing a status report of refunds consistent with this Order," the PSC said

The PSC said that, "In issuing this Order, the Commission is aware that SOE is no longer an active business in Maryland, and has been unresponsive to Commission correspondence since the company’s license was suspended. In the event of a failure by SOE to comply with this Order, the Commission will not be able to collect funds from SOE on behalf of customers. Affected former customers of SOE in Maryland may need to pursue in court a private action against SOE to enforce this Order, or an action under the Maryland Telephone Solicitation Act, which includes provisions for attorney fees under the Maryland Consumer Protection Act. In such cases, the court will make the final determination of the amount of any refund for each customer. Affected customers should contact their utility directly if they wish to obtain their consumption and billing records and applicable rates, and WGL and BGE are directed to accommodate those requests."

The PSC said that statute allows it to order refunds even though SOE is no longer licensed as a supplier.

"PUA § 7-507(k), states, in pertinent part: 'The Commission may ... order a refund or credit to a customer ... for just cause on the Commission’s own investigation or on complaint of the Office of People’s Counsel, the Attorney General, or an affected party.' Although PUA § 7-507(k) also empowers the Commission to suspend or revoke a license, it does not limit the power to issue refunds based on whether the supplier in question holds a license from the Commission. In this instance, there is no question that SOE committed the violations while operating under an active supplier license. Therefore, the Commission has the authority to order refunds for the period during which SOE did operate in Maryland with a license issued by this Commission," the PSC said

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