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PSC Imposes $400,000 Civil Penalty On Retail Supplier, Won't Revoke License
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The Maryland PSC issued an order imposing a civil penalty of $400,000 against SunSea Energy, LLC.
Upon full payment of that fine, a previously issued moratorium on SunSea’s marketing, solicitation, and
enrollment of new customers in Maryland will be lifted, subject to the conditions
described below.
Most notable of those conditions is that SunSea shall not market, solicit, or enroll customers by telephone in
Maryland -- a provision the company had already decided to undertake itself during the proceeding.
The PSC declined a recommendation from Staff that SunSea's supplier license should be revoked
The civil penalty relates to a proceeding in which the PSC had found that SunSea had enrolled customers without a signed contract and other violations of Maryland law and the Code of Maryland Regulations (COMAR).
The PSC had previously said in a news release that, "The Commission found that SunSea Energy violated specific provisions of Maryland law and COMAR by enrolling nearly 1,000 customers over the phone but did not provide those customers with a written contract or have the customers sign a contract prior to enrollment, failed to provide an accurate contract summary to those customers, and engaged in deceptive solicitations."
See our prior story for more details on the proceeding
Per prior PSC order, SunSea issued over $66,000 in customer refunds. SunSea also returned all of Maryland customers to default service (the PSC had only ordered those enrolled via telephone to be returned to SOS)
In assessing the civil penalty, the PSC found that SunSea's use of the term "competitive" rates was misleading
The PSC stated, "OPC and Staff witnesses have provided compelling evidence of a multitude of
violations by SunSea over the short duration of its presence in Maryland. As the
Commission previously found at the October 7 hearing, SunSea has evidenced a pattern
and practice of violating applicable Maryland laws and regulations by intentionally
providing false information and engaging in deceptive practices."
The PSC said, "Although the
Commission does not regulate retail supplier rates
and is not penalizing SunSea for
charging rates that Staff witness Mosier described as uncompetitive, the Commission
does find that SunSea misrepresented its product to Maryland customers, including by
promoting its product as 'competitive.' Its website contained the statement 'Yes
Competitive Rates!' even while charging customers prices that were multiple times
higher than the SOS rate provided by Maryland utilities. In particular, SunSea charged
rates ranging from 12.92 cents to 18.99 cents per kWh, in comparison to the SOS rate of
less than 8 cents per kWh. As Mr. Mosier testified, dozens of retail offers exist for 100
percent renewable products at under 8 cents per kWh, making SunSea’s 'competitive'
claim misleading and deceptive."
The PSC said, "SunSea’s deceptive claims were further exacerbated by its violation of COMAR
regulations that require suppliers to provide a clear and concise price description of its
services. The record indicates that SunSea failed to provide a specific charge per
kilowatt hour, instead indicating only that the rate would be variable. In fact, SunSea
failed to provide a contract summary of any sort prior to enrollment, in violation of
COMAR regulations."
The PSC said, "SunSea also misled customers by prominently advertising on its website that no
contract was required. Its website contained the statement 'No contract!' As Mr. Mosier
asserted, that statement is false because Maryland law expressly requires a contract and
contract summary."
With respect to SunSea’s argument that it did not need to obtain a written signature for a telesale due to an alleged pre-existing relationship with the customer, due to an alleged relationship the customer had with an affiliate
cable installation company, the PSC said, "The Commission likewise finds no merit to SunSea’s pre-existing relationship
argument. SunSea initially claimed it was not required to obtain a customer signature
because its affiliate -- a cable installation company -- had a pre-existing business
relationship with SunSea’s prospective customer, which would ostensibly exempt it from
the requirements under the MTSA. However, SunSea subsequently conceded that it
had no relationship with the prospective customer itself prior to the cable company’s
referral."
The PSC said the lack of any pre-existing relationship was demonstrated in the following
colloquy:
Commissioner Herman: But the person who is being
called to confirm their cable appointment, they do not
have a preexisting relationship with Easy Sales and
Marketing. They have a preexisting relationship with
Comcast, isn't that right?
Mr. Adigwe [Sunsea witness]: They have a preexisting relationship with
Comcast. And they can create by the customer verbally
agreeing to hear from an energy specialist, that's when
they go ahead and create a pre-existing relationship with
the company.
Commissioner Herman: How can it be pre-existing if
they're just creating it right then and there
"Considering the multitude of violations demonstrated by OPC and Staff, in
conjunction with the Commission’s discretionary fining authority of $10,000 per
violation, per day, under PUA § 7-507(l), SunSea could easily be subjected to a multimillion
dollar civil penalty. However, in its October 7 Order, the Commission observed
that SunSea's compliance with the refund process would factor into the consideration of
any penalty amount that may be determined and calculated at a later date. The parties
agree that SunSea fully complied with the Commission’s orders and has otherwise
appeared to act in good faith to achieve compliance after notification of its violations. In
particular, SunSea voluntarily ceased enrolling any Maryland customers prior to the filing
of OPC’s Complaint, upon learning of the allegations from OPC," the PSC said
The PSC said, "In addition, during the hearings, SunSea acknowledged its many mistakes and
took steps to mitigate the resulting harm. Counsel for SunSea stated, for example, that
'SunSea understands that the actions by its agents, who it subsequently terminated, are
illegal and it is the same as if it committed those violations.'"
The PSC noted that, upon learning of a third party vendor's actions that were contrary to PSC rules, SunSea terminated its contract.
"Similarly, after CAD advised SunSea that
it was not exempt from MTSA requirements regarding customer signatures, SunSea immediately stopped accepting customers through its cable affiliate and began enrolling
customers only through inbound telephone sales. Additionally, upon learning in May
2020 that the failure to state an actual rate on the TPV was a violation of Ohio law,
SunSea changed its policy in all states in which it operates to provide the rate in the
TPV," the PSC said
The PSC said, "The Commission agrees with OPC and Staff that during this complaint
proceeding, SunSea has 'made a good faith effort to comply with the Commission’s
order.' SunSea observed the Commission’s directive not to market, solicit, or enroll
customers in Maryland during the pendency of this proceeding. It also successfully
returned all customers that had been solicited via telephone, whether inbound or
outbound solicitation, to SOS, and in conjunction with Staff and OPC, SunSea drafted
and sent a letter of explanation to customers informing them of their right to a refund.
SunSea also rerated and refunded all customers solicited via telephone the difference
between SunSea's supply charges and the applicable SOS rate from the local utility for all
periods those customers were served. As of the January 27, 2021 hearing, SunSea had
mailed 1,258 refund checks to customers, totaling $66,675.91. In consultation with the
Commission’s Staff and OPC, SunSea provided an audit to ensure the accuracy of the
refunds given to customers as well as an audit of contracts acquired via door-to-door
sales, to ensure that proper customer signatures were acquired. Finally, SunSea worked with Staff and OPC to develop an accurate description of its renewable product consistent
with the requirements of COMAR 20.61.04.01."
"Considering all of the requirements of PUA § 7-507(l), including the number of
SunSea’s previous violations, the gravity of the current violations, and SunSea’s
subsequent good-faith efforts to achieve compliance, the Commission finds that a civil
penalty in the amount of $400,000 is appropriate," the PSC said
"The Commission denies the requests of Staff and OPC to revoke SunSea’s
license. Although SunSea has committed a multitude of violations, its subsequent actions
to mitigate harm and achieve compliance indicate that it could provide future value to
Maryland as a competitive retail supplier. The Commission will closely monitor
SunSea’s progress in that regard," the PSC said
The PSC ordered that SunSea shall not market, solicit, or enroll customers by telephone in
Maryland.
The PSC noted that, "Mr. Adigwe [CEO of SunSea] asserted that SunSea will no longer market,
solicit, or enroll customers via telephone as a result of the problems stemming from this
form of solicitation, and his counsel suggested that restriction as an appropriate remedy to
avoid future violations. The Commission accepts this proposal as an additional
condition of this Order."
Aside from this telesales prohibition, the PSC otherwise lifted the current moratorium on the marketing, solicitation, and enrollment of new
customers in Maryland by SunSea upon payment in full by SunSea of the
civil penalty.
The PSC will require reporting by SunSea on customer complaints and any vendors used in marketing, and will require the submission of marketing materials by the company
Case 9647
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PSC Says Supplier's Use Of Term "Competitive" To Describe Its Rates Was Misleading
Prohibits Telemarketing; Allows Supplier To Resume Other Marketing
August 19, 2021
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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