Maryland Utility Asks PSC to Suspend Retail Supplier's Ability to Enroll Customers

The Southern Maryland Electric Cooperative, Inc. requested that the Maryland PSC "temporarily suspend" Starion Energy PA, Inc.'s, "authority to communicate with or seek enrollment of any SMECO customer-member for the purposes of supplying electric power to any SMECO customer-member," during the period of a sought investigation into Starion's marketing practices.

SMECO noted that the PSC recently issued a show cause order (click here for story) to Starion concerning contract disclosures, and asked that the PSC also investigate the marketing and sales practices of Starion in SMECO's service territory.

"If the Commission finds that any marketing or sales practices of Starion or its agents/brokers are inappropriate, SMECO requests the Commission to permanently revoke Starion's license as an electricity supplier in Southern Maryland," SMECO said in a letter to the PSC.

SMECO alleged that when Starion began marketing in its territory in 2012, "Some Station Reps were reported as saying that they were from SMECO, that they represented SMECO, were authorized to call on behalf of SMECO, and/or were offering a SMECO program that could save the customer 15% off of his or her electric bill. Some were reported as stating that Starion buys power for SMECO, so the customer can eliminate the middle man by buying directly from Strarion [sic]."

SMECO counsel contacted Starion management on November 8, 2012 and, "to their credit, Starion immediately ceased all out bound calls to SMECO customers while that company reviewed recordings of some of these calls." As a result of the investigation, SMECO said that Starion promptly changed the Starion Reps' script, making the message clearer.

"On November 27,2012, SMECO counsel again contacted Starion management- this time about a door hanger that SMECO found misleading," SMECO said. SMECO alleged that the door hanger, "claimed a 'FREE' lowering of one's SMECO bill ... [and] claimed 'New Maryland government deregulation rules now allow ALL Future SMECO Bills to be reduced.'"

When alerting Starion to these hangers, SMECO said that it was assured that Starion had a well-developed and comprehensive training program, and the door hangers will be removed and the broker will be addressed immediately. The fact that such door hangers have not resurfaced indicates that Starion has made good on its assurance, SMECO told the PSC.

"Then, on December 5, 2012, SMECO management was informed by its Contact Center that, based on calls from customer-members, one or more Starion Reps seemed to have been targeting elderly and lower income families with a message indicating they were calling as a SMECO representative," SMECO alleged. "Once again, a call from SMECO counsel ensued. Starion committed to listening to calls again and committed to getting back with SMECO. To date, SMECO has not heard back from Starion on this particular commitment."

SMECO further alleged that, "On February 26, 2013, SMECO counsel contacted Starion management yet again, this time with the name of a Starion Rep who, according to SMECO's customer-member, said in his sales call that he represented SMECO, BGE and one other company (whose name the customer-member could not remember). Starion management committed to looking into it, yet SMECO has not heard back from Starion on this particular instance."

"Finally, on May 6, 2013, SMECO contacted Starion. SMECO's Contact Center reported that it received 90-120 customer calls regarding Starion during the prior week, with approximately 20 of them being complaints within a two-day period. The theme, it reported, remained similar to that of previous weeks' calls: purported unethical behavior by Starion and/or misrepresentation of information by the Starion representative stating he/she is associated with SMECO," SMECO alleged.

While SMECO said that Starion has worked with SMECO management at times in an attempt to react to and resolve any improprieties exhibited by Starion Reps, "[c]omplaints from SMECO's customer-members continue to be received in SMECO's Contact Center at an alarming rate."

"SMECO management is extremely concerned that reports of misrepresentation and deception continue with regularity. Further, the volume and length of Starion calls is adversely affecting SMECO's Contact Center from meeting the needs of other calls; in other words, having to manage so many customer calls created by Starion's marketing practices has and will impact SMECO's Contact Center performance in managing routine service calls, outage calls, payment arrangements, and other legitimate customer service inquiries. Some change must be made."