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PUC Rejects $650,000 Settlement Between Retail Supplier, Public Advocate To Resolve Investigation

January 6, 2021

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Copyright 2010-21
Reporting by Paul Ring •

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The Maine PUC rejected a stipulation filed by Electricity Maine, LLC (Electricity Maine) and the Office of the Public Advocate (OPA) to resolve an investigation into various alleged behavior of Electricity Maine, "because the Commission concludes the stipulation does not satisfy the Commission’s regulatory standards for approving stipulations."

Electricity Maine issued the following statement concerning the PUC's order

"Electricity Maine appreciates the Commission’s consideration of the Stipulation and is disappointed that its terms were not accepted by the Commission. We’re pleased that the Commission will continue to give us an opportunity to reflect on the record and that the Commission remains willing to consider our perspective on the appropriate outcome of the proceeding. Although the focus of the proceeding was on Electricity Maine’s 2018 door-to-door sales campaign, we serve thousands of residential and commercial customers who were not involved in that campaign and we remain committed to delivering a high quality service experience to all customers."

--- Statement from Electricity Maine

In discussing the background of the case, the PUC in its order noted, "On April 15, 2020, Commission Staff issued an Examiners’ Report. The Examiners’ Report recommends the Commission find and conclude that Electricity Maine, after having been put on notice of the serious nature of customer complaints against it, repeatedly engaged in false and deceptive statements associated with its door-to-door marketing activities in violation of the customer protection standards set forth in 35-A M.R.S. § 3203 and Chapter 305 of the Commission’s Rules. The Examiners’ Report recommends, among other things, revocation of Electricity Maine’s license to operate as a competitive electricity provider (CEP) following the transfer of its customers to an alternative CEP or to standard offer service. Staff provided parties with a May 8, 2020 deadline to file exceptions."

Subsequently, Electricity Maine filed a stipulation with OPA. In its order, the PUC stated, "Generally, the terms of the proposed stipulation would allow Electricity Maine to continue to serve Maine customers and engage in marketing activities, except for door-to-door marketing, and would require it to pay an administrative penalty to the Commission and additional funds to the OPA."

The PUC further noted, "Under the terms of the proposed stipulation, Electricity Maine would pay an administrative penalty and conditionally retain its license to operate as CEP in Maine. Electricity Maine would agree to, among other things, withdraw permanently from door-to-door marketing in Maine and allow its residential customers whose contracts originated from door-to-door solicitation to terminate their contracts without an early termination fee. Electricity Maine would pay a $500,000 administrative penalty pursuant to 35-A M.R.S. § 1508-A to be disbursed at the Commission’s discretion pursuant to 35-A M.R.S. § 117(3). Electricity Maine supports the funds being used by the Commission for a residential customer education program. Electricity Maine would contribute an additional $150,000 to a fund to be administered by the OPA in consultation with the Commission Staff for the purpose of educating residential customers about electric industry restructuring and the competitive retail supply market. Finally, the proposed stipulation includes other terms intending to ensure that Electricity Maine complies with applicable regulatory requirements when engaging in all sales channels and that the Commission, OPA, and Electricity Maine’s customers have access to Electricity Maine personnel to assist with any future questions or concerns."

In its order rejecting the stipulation, the PUC said, "the Commission cannot conclude that the overall stipulated result of the proposed stipulation would be in the public interest."

"As set forth in the OPA’s filings in the docket and as explained in the pending Examiners’ Report, following the hearing, the OPA sought a one-year license suspension and an administrative penalty of no less than $1 million. Under the terms of the proposed stipulation, there would be no suspension of Electricity Maine’s license to operate as a CEP, Electricity Maine would pay a significantly smaller administrative penalty, and Electricity Maine would pay an additional $150,000 to the OPA to fund customer education. Such an arrangement may result in a lack of confidence in the real or perceived motivations of the OPA in settlement, and thus the public interest would not be served," the PUC said

The PUC further said, "The Commission concludes that the provision in the proposed stipulation that would provide funds to the OPA is not consistent with legislative mandate. Title 35-A authorizes the assessment of utilities to fund the OPA, and those funds are designed to provide 'sufficient revenue for expenditures allocated by the Legislature for operating' the OPA. 35-A M.R.S. § 116(8). This section further requires the OPA to submit its budget recommendations as part of the unified current services budget legislation, and the statute specifies that the recommendations are subject to legislative approval. Id. § 116(8)(A). The OPA must make an annual report of its planned expenditures for the year and on its use of funds in the previous year. Id. The Legislature has directed that the OPA may receive other funds, 'as appropriated by the Legislature." Id. These provisions provide a legislative review and approval process for funding the OPA, and therefore the Commission does not have authority to approve a stipulation that directs funding to the OPA, in this instance a proposed payment of $150,000."

In rejecting the proposed stipulation, the PUC directed parties to file exceptions to the pending Examiners’ Report no later than January 19, 2021.

The PUC said that, "Nonetheless, as the proposed stipulation in other regards has merit, the Commission would consider a revised stipulation, to be filed contemporaneously with exceptions to the pending Examiners’ Report."

Parties may file a revised stipulation no later than January 19, 2021, the PUC said

Commissioner R. Bruce Williamson issued a concurring statement in which he stated, "The complaint record, coupled with other evidence in the record from discovery and the licensing docket of Electricity Maine, is extensive with regard to the door-to-door marketing activities of Electricity Maine. The Commission has not before reviewed such widespread customer complaints of poor performance and bad acts on the part of a CEP licensed in the State of Maine. Thus, I am concerned with the remedy in the proposed stipulation, which falls short of the recommendation of the Examiners’ Report to revoke the CEP license of Electricity Maine."

"I write separately to raise additional concern regarding whether, on the unprecedented record before the Commission, the proposed stipulated remedy is adequate as to be in the public interest," Williamson said

Chairman Philip L. Bartlett II issued a statement dissenting in part and concurring in part in which he said, "In light of the allegations of Electricity Maine’s serious and repeated violations of Maine law and Commission rules, I question whether Electricity Maine’s continued operation in Maine as a CEP is consistent with the public interest. Chapter 305 of our rules explicitly provides for license revocation for 'a violation or material noncompliance with any applicable provision of law or rule administered or enforced by the Commission,' or a CEP’s 'use of fraudulent, coercive, or deceptive practices . . . with respect to the provision' of electric supply. MPUC Rules, Ch. 305, § 3(A)(4)(b) & (d). Here, the instances of fraud and deception outlined in the Examiners’ Report are deeply troubling."

"As a Commission initiated enforcement action, the parties’ proposed stipulation, which is directly at odds with the recommendations of the Examiners’ Report, requires Commission scrutiny to ensure the public interest is served. Because this is a threshold issue, I believe it needs to be fully addressed by the parties and considered by the Commission before further evaluation of a proposed stipulation," Bartlett said

"In the normal course, parties have an opportunity to file exceptions to an examiner’s report before the Commission considers the examiner’s report. That has not yet occurred here because of settlement discussions. Thus, before reaching the merits of the proposed stipulation, I would direct Commission Staff to set a schedule for filing exceptions to give the parties an opportunity to present any disagreement with the recommended findings and conclusions in the Examiners’ Report. Following exceptions, the Commission would have the benefit of the parties’ positions as to whether the public interest is served by the Examiners’ Report, and the Commission could then consider the matter on the merits. Additionally, should the parties resubmit a proposed stipulation, the Commission could consider whether it satisfies the Commission’s regulatory standards for approving stipulations. For these reasons, while I would not yet reach the merits of the proposed stipulation and therefore dissent, I concur and join the portion of the Commission’s order requiring the parties to file exceptions and providing them an opportunity to re-file a proposed stipulation," Bartlett said

Docket No. 2010-00256

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