Maryland utility regulators ordered Smart One Energy to return all of its 10,000 customers to regular utility service and fined the company $561,000 after finding it broke state consumer protection laws by signing customers up for contracts to sell them natural gas without their consent.
The fine, announced Friday by the Public Service Commission, is the largest the agency has ever issued to a retail energy supplier.
Commission staff said the agency received three complaints that the company deceived customers in soliciting them for their business by enrolling them in contracts to buy natural gas without obtaining their signature and failing to provide the customers with summaries of their contracts, as is required by state law. The practice of signing unwitting customers up for energy contracts is known as “slamming.”
In filings with the commission, Smart One did not deny violating consumer protection laws, but said its actions “do not warrant a substantial fine, nor license revocation or suspension.”
Messages left Friday with Smart One, based in Wesley Hills, New York, and with a Baltimore-based attorney representing the company were not returned.
The Evening Sun
The company has served 17,000 Maryland customers since becoming a licensed retail energy supplier in the state in 2011.
Smart One Energy is one of 462 companies licensed to sell electricity or natural gas to Maryland residents. Since the state deregulated its energy market in 1999, private companies can sell energy directly to customers, though utilities such as Baltimore Gas and Electric Co. still deliver the energy and maintain the power grid and other infrastructure. Utilities still sell energy to customers who don’t sign up to buy it from retail suppliers.
Reports released by the Office of People’s Counsel and Abell Foundation last year said that while that retail competition was intended to drive down energy prices, many Marylanders are paying hundreds of dollars more for electricity and gas than they would if the stuck with standard utility service. The consumer advocates also raised concern about widespread slamming of customers and other deceptive and unfair marketing practices.
Jason Stanek, chairman of the Public Service Commission, said the action against Smart One Energy shows the state will “remain vigilant” to protect consumers.
“Maryland is committed to a thriving, competitive energy marketplace because customers stand to benefit from potentially lower rates, renewable and innovative energy products and promotional incentives,” Stanek said in a statement. “However, we are very concerned about the practices of a few retail suppliers, whose actions can harm customers and retail competition in Maryland."
The commission’s order requires that Smart One Energy return all of its customers to default utility service and to notify them within the next week. Commission officials said they will address potential customer refunds in a forthcoming order.
Anyone with complaints about retail energy suppliers are asked to call the commission’s consumer affairs division at (410) 767-8028 or to visit https://www.psc.state.md.us/online-complaints/ to file complaints online.