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June 12, 2011

Will fine against electricity seller end industry lies?

Doubt it. But it's good to see that the Public Service Commission dinged North American Power for telling blatant falsehoods about how much money BGE customers could save by switching from BGE's standard power package to North American's. A woman from North American who called me at home a few months ago said I could save up to 20 percent when the savings were nothing of the kind. Here's the column I wrote about it.

North American got fined $100,000, which is a decent hit for the small but rapidly growing outfit. Here is Hanah Cho's story on the fine. From the PSC's news release:

In response to a Complaint filed by Commission Staff, and after evidentiary hearings, the Commission found that: (1) four deceptive statements were contained in placemat advertisements marketing NAP services, which were placed at certain diners by four NAP representatives (e.g., claiming that there is “no contract to sign” and that “customers can ‘save up to 20%’”); (2) NAP falsely stated in its Terms and Conditions that they had been approved by the Commission; and (3) NAP failed to provide a complete and accurate price description in its Terms and Conditions, along with the Commission’s toll-free number and Internet address for complaints, as required.

Here is the statement put out by the company:

"We are so pleased to have resolved this issue to the satisfaction of the Commission and to our internal standards of doing business. While the fine is significant, we are grateful to the PSC Staff for bringing our attention to these matters and for acknowledging that this was not intentional-it was the result of an early stage company experiencing rapid growth. This process has caused us to re-examine our practices and hire some of the best compliance and energy experts in the business - we are a better company because of it."

They're probably not THAT grateful. Now let's see if they and others can clean up their act. When BGE's expensive electricity-supply agreements finally disappear in October and BGE's standard price falls again, the third-party marketers will have a hard time delivering any savings. That would pressure salesfolks to enhance reality again.

Posted by Jay Hancock at 9:03 PM | | Comments (0)
Categories: BGE/electricity
        

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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