The Maine Public Utilities Commission is set to vote Thursday on whether to open an investigation into the business practices of Electricity Maine, a competitive electricity provider that has come under fire for high rates and customer dissatisfaction.

The agency has scheduled a special deliberation, following an increase in complaints being fielded by the PUC’s consumer division and the Office of the Public Advocate.

The scrutiny comes after the rates most residential electric customers pay for their power supply spiked in January for the second year in a row, reflecting a steep wholesale price increase for natural gas, which helps drive New England’s power generation. For most households and small businesses, the result has been a nearly 50% hike in the cost of their annual standard offer, the default electricity service for customers who don’t sign up for one.

But rates for competitive electricity suppliers such as Electricity Maine also went up. And some of those suppliers’ customers don’t seem to keep track of their electricity contracts, or realize they have signed up with a company.

The ongoing confusion, and a recent study showing that households with competitive energy providers paid roughly 70% more than those on the standard offer, has led the public advocate to conclude the market is a failure and recommend to the Legislature that the residential competitive electricity supply option be phased out next year.

Since November, the PUC Consumer Division has received a total of 234 calls regarding competitive electricity suppliers. Of those calls, 166, or 71%, were about Electricity Maine.

“The vast majority of the Electricity Maine calls relate to the expiration of fixed-rate contracts in November and the migration of those customers to high, monthly, variable rate contracts,” said Susan Faloon, the PUC’s spokeswoman. “Regarding the other calls, customers don’t often understand, or keep track, of introductory fixed-rate offers and are surprised when that period ends.”

The PUC has rules around how and when competitive electricity suppliers must notify customers that rates are changing. But many Mainers were apparently caught off guard when their supply rates more than doubled.

“If customers did not respond to renewal notices that Electricity Maine or other CEPs are required to send,” Faloon said, “the customers may have been moved to a variable rate contract. In the case of Electricity Maine, the first month of service was 39.9 cents per kWh under the variable rate. Many customers did not recall receiving notice of the pending contract expiration or did not believe they received notice.”

EXAMINING ELECTRICITY MAINE

Electricity Maine is a subsidiary of Houston-based Spark Energy. In a statement to the Press Herald on Wednesday, the company said global energy markets that sent wholesale prices spiking had increased costs for Electricity Maine. That led to high winter rates for customers who had month-to-month contracts.

“While the winter rates were elevated,” the company said, “we can assure our customers that those month-to-month rates are coming down now that the market volatility appears to have subsided. In contrast to 2022, this year, market conditions allow us to offer existing and prospective Electricity Maine customers multiple fixed-rate contract options that are below the standard offer in most of the utility areas we serve.”

That’s small comfort to Lou DeTremblay of Topsham.

He doesn’t recall how long ago he signed up with Electricity Maine, but he was attracted by a low fixed rate. Something changed late last year.

“I honestly don’t remember getting a notification,” he said. “I can’t swear I didn’t get one. Maybe I overlooked it.”

In any event, the per kilowatt-hour cost for his power supply shot from 13.25 cents last year to 39.99 cents in January. That sent his total electric bill, including CMP’s delivery charges, from a typical cost of $200 a month or so to $471.29 in January. Of that total, $378.82 was for Electricity Maine’s supply charges.

“How can they do that overnight?” DeTremblay said in amazement.

DeTremblay was among the frustrated customers who have been reaching out to the Office of the Public Advocate.

“People get used to a relatively stable price,” Maine Public Advocate William Harwood said. “And when they see it jump to a number they’ve never seen before, they’re like, ‘Whoa, is this correct? Could it be a mistake?'”

Harwood said customers trying to save money may be attracted by low initial rates, but then don’t read the disclosure agreement. They may assume that the competitive provider rates are controlled or set by the state, which they are not.

Harwood said it’s unclear to him what the PUC will be able to do, but he recognizes customers are looking to state government for assistance.

“We’re all under a lot of pressure,” he said. “People want to know, ‘How did you let this happen?'”

MANY SOURCES OF CONFUSION

Since 2000, Maine’s electric service has been split in two. Regulated distribution utilities dominated by Central Maine Power and Versant Power deliver electricity. Private, unregulated generation companies supply it. Consumers can choose their power supplier, but if they don’t they receive standard offer service from an annual bid process at the PUC. That’s what roughly 90% of homes and small businesses do today.

Some customers are still confused about where their power comes from and blame CMP or Versant for recent jumps in their supply rates. One source of confusion is the way supply charges are included in the monthly bill customers receive. Although they are separated on the bill, many customers don’t notice. To help clarify, the latest electronic bills being sent by CMP have the supplier charges set off in blue type.

For the 65,000 or so households that select competitive providers, there’s also confusion. Potential savings hinge on keeping a close eye on changing contract terms and rates. This can be confusing, because contracts can have different time periods, with prices that reflect changing conditions in wholesale electricity markets.

The dynamic nature of those markets is evident today. Rates shot up last year in part because Russia’s invasion of Ukraine upended liquefied natural gas exports. But a warm winter in the United States and Europe, and adequate energy stockpiles around the war zone, have dramatically lowered wholesale prices for natural gas and electricity.

For 2023, however, homes and small businesses on the standard offer are locked in for the year. The rates are 17.6 cents per kilowatt-hour in CMP’s service area and 16.4 cents in Versant’s area. The providers in CMP’s area are subsidiaries of NextEra Energy and New Brunswick Power.

But according to the latest survey data from the public advocate, competitive provider rates vary widely depending on the contract terms. Some are higher than the standard offer, some are lower.

Some examples: Ambit Energy charges 26.2 cents per kWh for 12 months, C.N. Brown Electricity 16.5 cents for its “Green Choice” option, with a $100 early termination fee. Major Energy is at 13.99 cents for six months, while SmartEnergy bills 13.7 cents for six months.

Electricity Maine was not included in the public advocate’s survey because the company didn’t respond to the agency’s inquiry, Harwood said. A function on the company’s website allows consumers to explore rates based on their ZIP codes, but that option didn’t appear to be working Wednesday.

This isn’t the first time Electricity Maine’s business practices have come under fire.

In 2020, Electricity Maine’s parent company entered into a $14 million settlement agreement in a class-action federal lawsuit alleging fraud and deceptive practices in marketing electric power to Maine customers. The lawsuit alleges the company promised in its marketing that customers would pay no more than the standard offer price for electricity, but then it increased rates sharply after an initial period with lower rates.

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