Committee endorses Libby’s bill to protect consumers from controversial energy vendors
A bill by Sen. Nate Libby, D-Lewiston, to bring much-needed consumer protection and transparency to the controversial competitive electricity supply market received the unanimous, bipartisan support of the Legislature’s Energy, Utilities and Technology Committee on March 30.
The competitive electricity supply market is under fire for overcharging Maine customers in excess of $50 million over a three-year period and allegedly engaging in unfair business practices.
“This bill is a big deal. It will help customers be better informed about their choices for electricity and prevent them from being trapped in bad deals,” said Sen. Libby. “It implements commonsense consumer protections so that Mainers don’t have to become experts in utility law to keep from getting gouged on their bills.”
“These rules will put Maine on the leading edge of the country for protecting consumers and preventing abusive practices in the consumer electricity market,” said Tim Schneider, the Public Advocate.
Mainer’s monthly electric bills include charges for two services: the transmission of electricity, provided by the utility company, and the power itself. Utility customers are automatically charged the “standard offer” rate for power, set annually by the state. However, they may choose instead to sign contracts with Competitive Electricity Providers, or CEPs. Those consumers pay variable rates set by those companies.
The CEP market is designed to offer consumers choices and, ultimately, reduced prices. But an investigative report by the Bangor Daily News in November showed that while CEPs promised savings, they actually charged customers about $50 million more over a three-year period than those consumers would have paid if they had been charged the automatic standard offer.
Customers of Electricity Maine, the largest CEP in the state, have filed a class-action lawsuit against the company for alleged racketeering, unfair business practices and breach of contract for contracts it signed with consumers in 2012 and 2013.
Customers reported that in addition to seeing promised savings transform into additional costs, CEPs throughout the state renewed their contracts without their knowledge, and that the CEPs made it unnecessarily difficult to determine their contract expiration date. Additionally, many consumers may not know how to find the standard offer rate, making them easy marks for predatory marketing or sales pitches.
Sen. Libby’s bill — LD 803 — would require electrical utilities who service CEP customers to include information on their monthly bill directing their customers to comparisons between their rate and the standard offer. The bill would require CEPs to send a renewal notice by mail. It would also prohibit CEPs from renewing contracts without the express consent of the consumer.
Lastly, it would require the Public Utilities Commission, in consultation with the Public Advocate, to determine if consumers paid more for generation service purchased from competitive electricity providers instead of through standard-offer service and if so by how much and to submit its findings to the Committee on Energy, Utilities and Technology.
The bill now heads to the Senate for an initial vote.