Bangor Hydro-Electric Informs PUC of Violation of Standards of Conduct Relating to Competitive Suppliers

Bangor Hydro-Electric has informed the Maine PUC that it has committed a violation of Ch. 304 of the Commission's rules regarding Standards of Conduct, specifically relating to recommendations of competitive electricity providers, due to a quote from a BHE employee included in a third-party press release regarding BHE's large customer Standard Offer procurement.

As only noted in Matters (8/15), the PUC recently rejected all bids for the standard six-month contract for large non-residential Standard Offer supplies at BHE, and instead established monthly, market-based pricing, and granted BHE discretion to procure supplies in a manner that it saw fit to minimize costs and risks to customers. BHE ultimately selected Freedom Energy Logistics to manage the procurements for the period through February 2012.

Freedom Energy Logistics issued a press release announcing its selection as procurement manager. That press release included a quotation from a Bangor-Hydro employee, in which the employee stated that Freedom's, "understanding of and experience in New England's deregulated electricity market is unsurpassed."

"The inclusion of this statement in the press release constitutes a violation of Ch. 304 of the Commission's rules regarding Standards of Conduct," BHE said.

"Specifically, the statement violates the following proscription: No Recommendation. Employees of a distribution utility may not state or provide to any customer or potential customer any opinion regarding the reliability, experience, qualifications, financial capability, managerial capability, operations capability, customer service record, consumer practices or market share of any affiliated competitive provider or nonaffiliated competitive electricity provider," BHE stated.

Counsel for Competitive Energy Services, LLC contacted Bangor-Hydro on Friday, October 15 to notify the company of the violation. According to BHE, counsel for Competitive Energy Services requested that Bangor-Hydro have Freedom remove the offending quotation from the press release, and file this notification with the Commission of the incident.

Upon receiving the complaint, Bangor-Hydro attempted to determine how the violation took place. Freedom shared a draft of the press release with Bangor-Hydro prior to its issuance, and it was reviewed by regulatory counsel.

However, as the arrangement with Freedom arose in the context of providing Standard Offer service and not competitive electric service, Bangor-Hydro said that the review was inadequate to properly identify the standards of conduct issue implicated by the quote.

On Monday, October 17, the complaint was brought to the attention of Bangor-Hydro's compliance director, who entered the complaint into a complaint log. That same day Bangor Hydro contacted Freedom, which immediately removed the quotation from the press release on its website, and reissued the release though its PR vendor without the quotation.

With the filing of the notice of violation with the PUC, BHE believes that it has satisfied the requests of Competitive Energy Services' counsel, and has thus informally resolved the complaint pursuant to Section III.M.1 of its Implementation Plan.