Public Service Commission of Maryland imposes $400,000 civil penalty on retail supplier for violations of state law and consumer protection regulations
August 24, 2021
Earlier this month, the Public Service Commission of Maryland (“Commission”) issued an Order Assessing Civil Penalty (“Order”) of $400,000 against SunSea Energy, LLC (“SunSea”) for violations of state law and Commission consumer protection regulations.
This Order was the result of a complaint proceeding initiated by the Maryland Office of People’s Counsel (“OPC”) against SunSea. OPC alleged, among other things, that SunSea failed to acquire signed contracts following the enrollment of new customers, engaged in a pattern and practice of unauthorized enrollments, and made false and deceptive promises and misrepresentations.
Following the hearing in this proceeding, the Commission found that OPC met its burden of proof and provided compelling evidence of a multitude of violations of Maryland law and Commission regulations by SunSea, including: (i) intentionally provided false information and engaging in deceptive practices; (ii) enrolling customers by deception and without meeting the minimum contracting requirements; (iii) failing to reduce the contract to writing; (iv) failing to include oral representations in a written contract; (v) failing to provide a contract of any sort prior to enrollment; (vi) failing to provide a contract summary of any sort prior to enrollment; and (vii) failing to disclose all material contract terms. As a result, the Commission ordered that SunSea comply with several directives, including extending a moratorium on SunSea for all marketing and solicitations of new customers in Maryland until further direction from the Commission.
In the present Order, the Commission determined that it is satisfied with SunSea’s compliance with its prior directives. Nevertheless, the Commission imposed a civil penalty of $400,000 upon SunSea, noting that the Commission is particularly intolerant of deceptive statements by retail suppliers because they are inimical to the developing competitive market. The Commission, however, denied the requests of OPC and Commission Staff to revoke SunSea’s electric and gas licenses. Further, the Commission determined that the previously-imposed moratorium upon SunSea on the marketing, solicitation, and enrollment of new customers in Maryland will be lifted upon the payment of the civil penalty. Finally, the Order imposed new conditions upon SunSea, including ordering that SunSea can no longer market, solicit, or enroll customers via telephone as a result of the problems stemming from this form of solicitation.
This Eckert Seamans Energy Supplier Litigation Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice. If you have any questions regarding the above, please contact Kristine Marsilio at kmarsilio@eckertseamans.com or 717.237.6037, or any other attorney at Eckert Seamans with whom you have been working.