PSC Fines Retail Supplier $300,000, Modifies Proposed Marketing Moratorium

The Maryland PSC recently adopted a final order which imposes a civil penalty of a $250,000 on Major Energy Electric Services, LLC and a $50,000 civil penalty, jointly and severally, on Major Energy Electric Services, LLC and Major Energy Services, LLC, as a result of an investigation into the companies' marketing practices.

The PSC, with one modification, adopted the findings of a proposed order concerning the investigation.

Click here for a discussion of the proposed order's findings

In its final order, the PSC denied most appeals of the proposed order, including an appeal from Major Energy to reduce the civil penalty in light of the lower amounts adopted in similar cases, as the PSC cited the unique facts of each case

The Maryland PSC also imposed a moratorium on residential door-to-door solicitations by Major Energy until Major Energy has revised its sales agreement to strictly conform the disclosure of the rescission period to applicable provisions of the Maryland Door-to-Door Solicitations Act.

Though Major Energy has already ceased offering variable rate plans in Maryland, the PSC adopted a moratorium on Major's marketing of a variable rate product (either electricity or natural gas) until Major Energy has modified its sales script to require its sales agents to discuss the nature and risks associated with the variable rate, to represent that there is no guarantee the customer will see savings in any given month over the default energy rate in effect at the time of the solicitation, to disclose the current established variable rate to allow the customer to compare it to the price to compare on the utility bill and to describe how to obtain the monthly variable rate in effect thereafter; and to disclose that even though it is a month-to-month contract and may be canceled without any fee, the Major Energy rate in effect may be billed to the customer until the local utility makes the change in its system and the approximate length of time it may take for the switch.

However, the PSC did not adopt the proposed order's requirement that in order for the moratorium to be lifted, Major Energy's revised sales agreements and scripts were required to be approved by PSC Staff and the Office of People's Counsel (OPC).

"We do ... lift the requirement that Staff and OPC shall approve the Company’s revised materials before the moratorium will be lifted, because, as Major argues, it would be unfair to leave Major at their mercy. Instead, we direct Major to revise its sales agreements and marketing materials to comply with Maryland law, and file them with Commission Staff and OPC. Upon so filing, Major may resume door-to-door marketing and marketing its variable rate product (if it wishes to resume so) in Maryland," the PSC said

Major is not required to seek approval from the Commission to lift the moratoriums, the PSC said

The PSC affirms the proposed order's finding that Major Energy Electricity Services, LLC served customers at Pepco, Delmarva, and Potomac Edison without Commission authorization, because Major's initial license only listed BGE as the service areas in which it would market. The PSC ordered Major Energy Electricity Services, LLC to send a letter to each active customer in the service territories of Pepco, Delmarva, and Potomac Edison, advising the customers that it did not have a license to contract with the customer and that the customer has 30 days to cancel the contract with Major Energy without penalty.

The PSC denied OPC's request that Major Energy be ordered to issue refunds to all of its customers, finding such request to be unsupported and noting that refunds were issued to customers filing complaints with the PSC

A Major Energy spokesperson provided the following statement to EnergyChoiceMatters.com: "The Maryland PSC Order involved activities that emanated from the Polar Vortex of 2013/2014. Major Energy respects the decision of the Maryland PSC and is pleased to put the matter behind us and move forward."

Case No. 9346(b)