Maryland Staff Seek Show Cause Order Against Retail Supplier Regarding Contract Disclosures

Staff of the Maryland PSC have petitioned the Commission for a show cause order against Starion Energy PA, Inc. regarding Starion Energy's disclosures of customer contracts.

Staff specifically asked that the PSC direct Starion Energy to show cause whether the company is in compliance with Pub. Utils. §§ 7-505 and 7-507 in its residential customer marketing, advertising, and trade practices.

Staff did not seek additional relief, but its proposed show cause order would direct Starion to show cause why civil penalties should not be imposed if the Commission finds that the company in its customer marketing, advertising, or trade practices has violated the statutes, regulations, and Commission orders.

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"Starion appears recently to have commenced a direct or door-to-door marketing and sales campaign where, once a customer agreed to use their service, the contract was verified using an automated telephone call that noted the essential terms and conditions of the contract," Staff said.

"Beginning in January 2013, the Office of External Relations ('OER') of the PSC recently began receiving a large number of complaints and inquiries from residential customers regarding Starion. For example, during the month of April 2013, OER reported that it had received 51 complaints and 78 customer calls which referenced Starion," Staff said.

"When OER attempted to mediate customer disputes with Starion, the Company provided documentation indicating that, if a customer had agreed to a month-to-month contract, the customer had to provide a written thirty day notice and, in some cases, pay a termination fee," Staff said.

"The Starion website has a disclosure statement for Maryland customers which lists the terms of service. A customer using the portal on the Company website must indicate that the disclosure statement has been read prior to signing up for service from Starion. The disclosure statement has terms of service which provide, for a month-to-month contract, that: A customer may terminate the contract by calling a customer service line or through e-mail; and [u]pon termination of service, the Company will not assess a termination fee," Staff said.

"However, the disclosure statement provided by Starion during OER mediation of customer disputes is different from that posted on its website," Staff said

"This disclosure statement has terms of service which provide, for a month-to-month contract, that: A customer, to terminate the contract, must provide a thirty day written notice; and [u]pon termination of service, a termination fee (listed as $50 in [copy obtained by Staff]) would apply," Staff said.

"There is no indication that a copy of the disclosure statement," containing the termination fee was provided to customers at the time they were being signed up for service, Staff said.

"Given the large number and recent surge in customer complaints and inquiries to OER since January 2013 regarding Starion, the Company may not be providing adequate and accurate information to its Maryland residential customers at the time they enter into contracts for electric service as required by statute," Staff alleged.

Separately, the Office of People's Counsel said that it has learned of, "numerous complaints" regarding Starion Energy marketing tactics employed in at least two utility service territories, which OPC alleged, "are demonstrably false or misleading."

OPC said that it, "is investigating the company for potential violations of Consumer Protection regulations of the Commission, as well as of the Consumer Protections and Miscellaneous Protections sections under the state Commercial Law Article," and asked the PSC for a copy of all complaints filed with the PSC concerning Starion.