Electricity Maine, a competitive electricity provider under fire from the state Office of the Public Advocate over its pricing, will refund $6 million to about 20,000 current and former customers – an average of $300 each – and pay a $315,000 penalty as part of a settlement approved Wednesday by state utility regulators.

The 3-0 vote by the Public Utilities Commission ended a dispute that started in February 2023 between the electricity retailer and Public Advocate William Harwood, who accused it of overcharging customers. Electricity Maine was founded in Auburn in 2011 and bought in 2016 by Spark Energy Inc. of Houston.

Electricity Maine said in an email that it was “pleased to have worked” with the PUC and Public Advocate “to resolve this matter amicably and will continue in our commitment to compliantly serve and provide Mainers with a choice in their electricity supplier.”

Harwood said the Office of the Public Advocate received more than 125 complaints from Electricity Maine customers in four months between 2022 and 2023.

“Electricity Maine customers were overcharged by millions of dollars compared with what they would have paid had they paid the standard offer price for electricity,” he said.

The standard offer, which most ratepayers take, is set by the PUC and is currently 10.6 cents per kilowatt-hour for Central Maine Power Co. customers. 

The settlement caps Electricity Maine’s rate at 6 cents a kWh more than the standard offer. That is still substantially more than the standard offer, but is an improvement over variable rates from the provider that went as high as 40 cents a kWh, said Brian Marshall, senior counsel at the Office of Public Advocate. The cap ends in June 2026. In a previous settlement rejected earlier this year by the PUC, the cap would have expired at the end of 2024, he said.

The penalty was not called for in the earlier settlement. “We felt really strongly it needed to be there,” Harwood said.

Customer refunds were extended to three months from two in the previous settlement, Marshall said.

Harwood has been sharply critical of Electricity Maine for years, calling for it to be barred from doing business in Maine.

PUC Chairman Philip L. Bartlett II said the changes “significantly improve” on the previous settlement by providing additional customer protection and that the penalty recognizes the “severity and history of alleged violations.”

The penalty is paid to the PUC, which can use it to fund programs, such as low-income assistance.

The Legislature and Gov. Janet Mills enacted a law in April requiring competitive electricity providers to disclose to consumers where information is available to compare a service with the standard offer and forbids providers from renewing a contract without advance notice by mail. The law also limits how much a customer may be billed and details when a variable rate may be charged.

The Legislature restructured the state’s electric industry in 2000 by ending the generation side of the business for utilities, leaving them only to deliver electricity. For the supply of electricity, consumers may choose either the standard offer rate or a competitive electricity provider such as Electricity Maine.