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"THIS IS FRAUD", PSC Chair Says Of Supplier's "Threatening" Notice On Mailer To Customer

PSC "Actively Targeting" Retail Suppliers

Retail Energy's "House Is On Fire" In State, Chair Says; Industry On "Thin Ice", Commissioner Agrees

Chair Says Utilities Have "Responsibility" To File Complaint Against Retail Suppliers When Aware Utility Name Misused By Suppliers

Chair Says PSC Staff, OPC Have Authority To "Instruct" Suppliers To Cease & Desist Use Of Deceptive Marketing Materials

February 7, 2023

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Copyright 2010-21
Reporting by Paul Ring •

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"We do have retail suppliers in our midst that engage in deceit, confusion, and trickery in order to close the deal and effectuate the switch with an unsuspecting customer," Maryland PSC Chairman Jason Stanek said in another rebuke against the retail energy industry during today's PSC administrative meeting.

Of such deception, Stanek repeated that, "those days are over," reiterating that, as previously reported, the PSC began a "maximum enforcement" campaign against retail suppliers on February 1.

See prior story: PSC Launching "Maximum Enforcement" Against Retail Suppliers In New Blitz

"We are now actively targeting suppliers who appear to be engaging in such [deceptive] conduct," Stanek said

Stanek is optimistic that the PSC will be able to clean up the retail supply market, but noted that, prior to the new maximum enforcement campaign, enforcement efforts had turned into a game of "whack a mole". Stanek reported an almost near-record high in supplier complaints in January

Stanek said this Monday, about two weeks after the PSC had already publicized that it was embarking upon its "maximum enforcement" campaign, he received two mailed offers from suppliers. Stanek said that the mailers are deceptive, and said that it is "beyond concerning" that such materials were received during the maximum enforcement period

Stanek has not yet even opened the offers but said that they, "are deceitful from the outside."

"One of these here, makes it look like I've received a notice -- a threatening notice -- from Pepco, that they're trying to reach me. Oh, 'Very important. You must respond. We're attempting to reach you,' in much larger font than the name of the company," Stanek said in describing the mailers

"This is fraud," Stanek said. "This is deception."

"This will not continue," Stanek said

"These suppliers have no business -- no business whatsoever -- supplying customers in Maryland," Stanek said

Stanek did not identify by name any of the suppliers that had sent the mailers

Notably, Stanek said that, "Commission Staff, particularly the Staff counsel's office, the Commission's Consumer Affairs Division, the Office of People's Counsel, all have the responsibility to review supplier marketing materials used in Maryland and likewise have the authority to instruct such suppliers to cease and desist using such deceptive marketing materials that may violate state law and state regulations."

Stanek further enlisted utilities to address fraud by suppliers

"We need support from our utilities ... large co-ops, our investor-owned utilities," Stanek said

"When you [the utilities] become aware that your name ... is being used to deceive customers ... you have a responsibility to file a complaint with this Commission," Stanek said, again noting that one of the supplier's mailers prominently featured the local utility's name on it at the top (as noted above)

Utilities cannot be idle participants in preventing supplier fraud, Stanek said

Stanek said that utilities must also give customers new service numbers when customers complain about being slammed repeatedly. Stanek said once a service number gets onto the black market, suppliers flip a customer back and forth. "We have documented evidence that occurs," Stanek said

Stanek said that support is also needed from the retail energy industry and their trade associations, lest a bad apple ruin the bushel

Stanek also said that, "The retail supply industry needs to stand-up and self-police."

"Your house is on fire in Maryland and I just don't see a lot of retail suppliers doing what they need to do, the reputable ones, to combat the scourge that we're currently seeing in our state," Stanek said

Stanek encouraged suppliers to self-report any violations in writing to the PSC's compliance and enforcement unit in the CAD division, but stressed, "it's not amnesty." But the penalty will be much more severe for violations that are not self-reported, Stanek said

Commissioner Michael Richard reiterated that he stands "shoulder to shoulder" with Stanek on the issue.

Commissioner Anthony O’Donnell also strongly affiliated himself with Stanek's comments

O’Donnell said that, "This industry's got to realize, it's on very thin ice here ... It better straighten it up, because the promise hasn't been realized, and the problems are thick and deep."

O’Donnell said that choice hasn't worked for residential customers, though it has worked for C&I customers

Commissioner Patrice Bubar firmly supports Stanek's comments and added, "We want the market to survive," and thus the need to get rid of the bad actors

On a positive note, Stanek did take time to highlight NRG's recently announced new EV-focused product available in the BGE service area, which includes a Level 2 Charger as part of the product (see details in prior story here).

Stanek credited NRG for thinking outside the box and providing a "meaningful" option to consumers, noting the Level 2 charger, if purchased on its own, costs several hundred dollars

"It's much better than a cheap promo that we've seen before, whether it be [the] mini-fridge example that we've heard a lot, gift cards, other less significant products that we've seen used by suppliers to encourage customers to make the switch. And let me say there is nothing wrong with cheap promos and giveaways, there's no rules against giving away gift cards, as long as the terms and conditions are clear," Stanek said


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