Maryland officials Friday ordered Starion Energy, a Connecticut-based company licensed to sell electricity in parts of Maryland, to pay $350,000 for multiple violations of state law, including more than 100 instances in which it enrolled, or re-enrolled customers without consent.
The penalty is the Public Service Commission's most severe yet against a retail energy supplier. The commission imposed a $60,000 fine on Viridian in 2012 and a $100,000 fine on North American Power & Gas in 2011.
Starion, which received its Maryland license in 2010, is licensed to supply energy in six states, including Maryland. It was hit with sanctions in Connecticut and is being investigated in Delaware, according to the order from the state's Public Service Commission.
In Maryland, the commission found that Starion's sales representatives misrepresented policies, had discrepancies between contracts and online language, misled customers to believe they worked for a different company, and failed to adhere to state rules during door-to-door sales, such as notifying customers of the right to cancel within three days, among other violations.
"In fact, to support an open marketplace, we must ensure that competition is fair and ethical, rather than misleading and obfuscating," the commissioners write in the order. "Companies that misinform, mislead or otherwise deceive consumers undermine the benefits intended to accrue to customers as a result of fair competition, whether they do so intentionally or not."
Officials at Starion, which can appeal the decision, could not be reached for comment. According to the order, the company attributed the problems to insufficient oversight and has taken steps to fix them, including the creation of a compliance department and a "Do Not Say" list for sales representatives.
The commission said those measures convinced it not to revoke Starion's ability to operate in Maryland. The company faces review in six months when it must reapply for its license.
Money from the fine goes to the state's general fund and barring appeal must be paid within 60 days.
The order also said it is concerned that some of Starion's customers are not fully aware of their exposure to energy price fluctuations in other markets, calling its decision to pass on high energy costs in other markets to some of its Maryland customers "dubious."
"Although we acknowledge that we lack direct authority to regulate Starion's pricing policies, we are nonetheless concerned that Maryland customers may not be fully informed that their variable rate may be calculated based upon market prices across such a wide geographic area," they write in the order.