Maryland PSC Fines Viridian Energy PA, LLC $60,000 for "False and Misleading Representations"

The Maryland PSC has imposed a civil penalty totaling $60,000 on Viridian Energy PA, LLC for violating Public Utilities Article § 7-507 and COMAR 20.53.07.07 by, "making false and misleading representations about Viridian's relationship with utility companies and the savings customers would achieve in widely distributed advertisements, and by claiming that customers did not need to sign a contract."

A Staff complaint regarding the alleged violations had been first reported by Matters.

The allegations stemmed from certain advertisements created by independent associates of Viridian , which, among other things, included the Baltimore Gas & Electric logo; stated that "no contract" was required for service; and stated that customers could save up to 20%, when the rate was variable in nature.

None of the ads had been approved by Viridian.

Cami Boehme, Viridian's Senior Vice President of Marketing & Brand Communications, stressed that the violations occurred over 1.5 years ago, and since that time Viridian has revamped its policies and procedures to build a culture of compliance.

Such remedial measures include voluntarily terminating its door-to-door marketing program, creating "Viridian University" to ensure appropriate and ongoing training and education for its associates, ceasing allowing associate-generated marketing materials, and placing an increased focus on third-party verification measures.

"We encourage Viridian to continue on this path of compliance," the PSC said.

Still, the PSC said that while these measures represent "good faith" mitigation efforts, they do not serve as a basis on which to overlook the violations.

"It was false, misleading, and deceptive for Viridian to claim that there would be no contract required for its services, in part because COMAR 20.53.07.08 requires contracts for service from electricity suppliers, but also because Viridian itself requires its customers to enter into a contract by agreeing to its Terms and Conditions prior to the start of service," the PSC found.

"It was misleading and deceptive for Viridian to utilize the BGE name and logo as doing so implies affiliation with the utility – something Viridian does not have. Likewise, the use of the phrase, 'BGE Approved' was also false, misleading, and deceptive, as BGE did not approve Viridian's services in any manner. And the claims to save certain percentages off of an electricity bill are misleading and deceptive as they represent, at best, a brief potential savings opportunity based upon constantly fluctuating rates and fees, not to mention that the claims fail to acknowledge the possibility that Viridian's services would be more costly than the utility'," the PSC said.

The PSC said that while Viridian did not approve the ads, the creation of the ads by independent associates showed that Viridian's associate training and compliance processes in place at that time (which have since been strengthened), "did not prevent associates from preparing and distributing ads that violated Viridian's own policies, not to mention our regulations."

The Commission did not sustain Staff's request that the Commission find that Viridian violated COMAR 20.53.07.08, which requires there to be a contract for the provision of electricity services and further details the minimum requirements to be contained in such contract. Although Viridian formerly used the term "no contract" as noted above, the PSC said that Viridian did, in fact, require all customers to consent affirmatively to the company's Terms and Conditions prior to completing enrollment with the company and beginning to receive its services. Furthermore, a review of Viridian's Terms and Conditions shows that the minimum contract requirements listed in COMAR 20.53.07.08 are satisfied, the PSC said. For these stated reasons the PSC found that Viridian did require customers to enter into a contract for services and that the contract was sufficient, and therefore did not violate COMAR 20.53.07.08.

In a news release, the PSC said that Viridian had, "more than 140,000 customers in Maryland." This number is inaccurate, and represented Viridian's total customer count across all markets at the time of a February 2011 hearing in the case. Viridian's total customer count now exceeds 200,000.