Maryland PSC Takes Affinity Energy Management Broker Application Under Advisement, Staff Recommends $22,500 Fine

The Maryland PSC took under advisement the application of Affinity Energy Management for an electric broker license after Staff recommended granting the license, and fining the broker $22,500 for its operations in the state prior to licensure.

The proposed civil penalty is much higher than the fines imposed on most brokers which have sought licensure after previously operating in the state, which have typically been the greater of $100 or the Commission assessment that the broker would have paid if it had been licensed and subject to the assessment during the time it was active.

Staff argued during yesterday’s administrative meeting that a higher fine is appropriate given that Affinity Energy Management was aware of the licensing requirement as early as 2008 (having operated since 2006), but that Affinity Energy Management did not apply for a broker license until July 2010 despite this awareness.

Commissioner Lawrence Brenner, who was not present at the administrative meeting yesterday, has previously said that the Commission should consider higher fines than the standard $100 given the time that has elapsed since the PSC has been actively seeking unlicensed brokers and informing them of the licensing requirement in early 2008 (see 7/22).

Staff's penalty amount is based on a fine of $25 per day of operations prior to licensure.

Sole proprietor Edward Jackson of Affinity Energy Management took responsibility for the delay in seeking licensure, but called the fine amount punitive in light of the penalties assessed on most other brokers seeking licensure after conducting operations without licensure. Jackson stressed his cooperation with the Commission, and Staff agreed that Affinity Energy Management, unlike some of brokers, did not attempt to conceal its awareness of the licensing requirement during Staff's investigation.

Jackson noted that he obtained the requisite bond for licensure in 2008, but did not file the license application until this summer due to the large amounts of business he was conducting, as well as believing that the license application was only a formality once the bond was filed.

Jackson said that a more appropriate fine would be $4,600, the penalty imposed on America Approved, which had also continued operations without licensure even after learning of the licensure requirement.

Chairman Douglas Nazarian noted, however, the if the same formula used to reach the America Approved fine were applied to Affinity Energy Management (under which the Commission ordered the forfeiture of all pre-licensure revenues), the penalty for Affinity Energy Management would be in the six figures.

Nazarian stressed that the license application is not burdensome, and questioned whether the Commission could have confidence with Affinity Energy Management's ongoing ability to keep up with regulatory requirements if it could not complete the application in two years. Jackson responded that Staff believes that Affinity Energy Management has shown the requisite managerial competency for licensure.