BEFORE THE
PUBLIC SERVICE COMMISSION
OF MARYLAND
In the Matter of the Investigation into the Marketing,
Advertising, and Trade Practices and the Licensing
Status of Major Energy Electric Services, LLC
and Major Energy Services, LLC
Case No. 9346(b)
REPLY MEMORANDUM OF THE STAFF OF THE
MARYLAND PUBLIC SERVICE COMMISSION
OPPOSING THE APPEAL BY MAJOR ENERGY ELECTRIC SERVICE, LLC
AND MAJOR ENERGY SERVICES, LLC
The Staff Counsel Division of the Maryland Public Service Commission submits this
reply to the appeal (Mail Log (“ML”) 179373) filed by Major Energy Electric Service, LLC and
Major Energy Services, LLC (collectively referred to here as Major) in connection with the
October 23, 2015 Proposed Order (“PO”) issued by Public Utility Law Judge Romine (ML
176598). For the reasons discussed below, the Commission should reject Major’s appeal, and
should adopt the findings in the Proposed Order.
I. MAJOR MISLED CUSTOMERS BY GUARANTEEING COST SAVINGS
Major (pp. 4-5) challenges Judge Romine’s finding that Major violated the Maryland
Code of Regulations (“COMAR”) and the Public Utilities Article (“PUA”) of the Annotated
Code of Maryland by guaranteeing cost savings that did not occur. Major asserts that its “terms
and conditions, and its sales and TPV [Third-Party Verifications] scripts, do not include
language guaranteeing savings.” (p. 5).
Major fails to acknowledge that its marketing materials are littered with statements that
guarantee cost savings for customers. For example, the script that Major utilizes for door-todoor sales of variable price gas and electric supply includes the statement: [BEGIN
CONFIDENTIAL] ███████████████████████████████████████████
███████ [END CONFIDENTIAL] 1 Major’s phone solicitation script for variable price
electricity supply includes a similar guarantee of cost savings:
[BEGIN CONFIDENTIAL] █████████████████████████████
██████████████████████████████████████████████
███████████████ [END CONFIDENTIAL] 2
Although Major’s statement that customers could realize savings “up to 10% or more” did not
guarantee any specific level of savings, the statement guarantees some level of savings. OPC
witness Alexander pointed to additional claims by Major of guaranteed cost savings:
… all of Major’s promotional advertising and its sales scripts for telemarketing and door
to door sales agents used in Maryland in 2013 suggest that the customer can save money
by selecting Major or that Major could purchase electricity in a manner that is more
efficient or less expensive than the utility. These materials are designed to suggest that
choosing Major Energy will save the customer money on their energy bill. All of these
promotional brochures and materials include statements, such as, [BEGIN
CONFIDENTIAL] “███████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
████████████████████████████████████████████████
[END CONFIDENTIAL] [OPC Exh. 11C (Alexander Direct Testimony), P19, L6-20]
Major’s telemarketing script also includes the following statement that appears to claim that
Major’s prices are lower than the utility’s prices because the utility’s prices include costs in
connection with the utility’s distribution system:
[BEGIN CONFIDENTIAL] █████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
1
2
Major Exh. 4, Attachment D, p. 1.
Major Exh. 4, Attachment E, p. 1 (emphasis in original).
2
█████████████████████████████████████████████████
█████████ [END CONFIDENTIAL] 3
Significant here is that contrary to the statement in Major’s script, neither the SOS price of
Potomac Electric Power Company (“PEPCO”) nor Baltimore Gas and Electric Company
(“BGE”) includes electricity distribution costs, such as costs associated with maintenance of the
distribution system (including wires (conductors)), and utility trucks and other equipment.
Another misleading misrepresentation by Major was its statement to customers that if
Major’s prices are higher than the SOS price, it is likely that Major’s prices will be lower than
SOS during the next time period:
[Begin Confidential] ████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
███████████████████ [End Confidential] [OPC Exh. 11C (Alexander Direct
Testimony), P41, L18-25]
This statement by Major grossly mischaracterizes the way in which SOS prices are established,
as noted by OPC witness Alexander:
First, Major did not rely in any significant manner on “hedging” … . Second, the
statement that utilities [Begin Confidential] ███████████████████████
██████████████████████████████████████████████████
█ [End Confidential] is also false. Utilities in Maryland purchase SOS contracts
through competitive bids based on fixed price, “full requirements” contract terms. These
contracts do not require the utility to bear any risk about how wholesale markets operate
during the term of the contract. Rather, the wholesale market seller assumes that risk in
these SOS contracts. As a result, utilities in Maryland do not seek to [Begin
Confidential] ████████████ [End Confidential] with higher prices during
quarterly SOS price changes. Whether or not these statements by Major might be
applicable to some jurisdictions, they are certainly not applicable to Maryland SOS
policies. Therefore, Major falsely misrepresented to its customers that their SOS prices
[Begin Confidential] ███████████████████████████████████
█████ [End Confidential] These statements are repeated in Major’s attempts to
convert variable rate customers into fixed rate customers why they called Major to
3
Major Exh. 4, Attachment E, p. 1 (emphasis in original).
3
complain about their high variable rates in early 2014. [OPC Exh. 11C (Alexander
Direct Testimony) P42, L2-18]
These guarantees of cost savings were reiterated by Major’s sales representatives as part of the
verification of enrollments during the TPV process. In one TPV conversation, the sales
representative told the customer that [BEGIN CONFIDENTIAL] ████████████████
███████████████████████████████████████████████████████
██████████████████████ [END CONFIDENTIAL] (Tr. 470, L8-11). In response
to the customer’s query as to “how long would this discount continue?”, the sales representative
said that the discount [BEGIN CONFIDENTIAL] ████████████████
██████████████████████████████████████ [END CONFIDENTIAL]
the sales representative assured the customer (Tr. 473, L2-3).
Likewise, a brochure that Major distributed to potential customers touts the cost savings
that customers reap by buying electricity and gas from Major.4 The first page of the brochure
says: “Congratulations on Choosing Major Energy and Major Savings” (emphasis not in
original). The brochure includes additional assertions that a customer will realize significant cost
savings by buying electricity or gas from Major:
1) “It is simple to see your energy savings month after month” by buying from
Major.
2) Major will “supply your gas and electricity at the best available rates”.
3) “Lowering our Customer’s Energy Bills Safely and Reliably”
Thus, the focus of Major’s marketing was a guarantee of cost savings for customers.
4
OPC Exh. 2; Major’s Exh. 4, Attachment E.
4
But the guaranteed cost savings did not occur. Instead, Major’s customers, in many
months, paid more than the SOS price of the pertinent utility and, hence, the customers realized
no cost savings in those months.5 OPC witness Alexander noted:
Based on my evaluation of Major’s prices charged to BGE and Pepco residential
customers for electric generation supply between January 2013 and April 2014, [BEGIN
CONFIDENTIAL] █████████████████████████████████████for
██████████████████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
████████████████████ [END CONFIDENTIAL] In addition, Pepco
provided an analysis of Major’s average price charged to residential customers for each
month September 2013 through March 2014. According to [Pepco’s] billing records,
[BEGIN CONFIDENTIAL] ████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████████████████████████
██████████████████████████████ [END CONFIDENTIAL] As a
result, there is no reasonable basis for Major Energy’s marketing statements that seek to
enroll customers in Maryland by emphasizing lower bills or rates. Further, [Major’s]
repeated claims that its rates were “historically” 10% lower than utility rates (even if
viewed on an annual basis) as an inducement to enter into these contracts were false.
[Exh. 11C, P29, L16 – P30, L16]
Judge Romine agreed with Ms. Alexander’s conclusion that, in many months, Major’s variable
price was higher than the SOS price (PO at 15-16).
Significantly, nowhere in its appeal does Major challenge this conclusion. Instead, Major
tries to brush aside its guarantees of cost savings as “amount[ing] to nothing more than vague
generalities and puffery.” (pp. 4-5). Puffery consists of generalized, non-quantifiable claims that
a company’s products are superior to its competitors’ products. An example of puffery would be
a supplier’s claim that it provides a supply service that is “better” or “superior” than the supply
service offered by other suppliers. There is no quantitative way to validate this claim.
5
PO at 15-16; Exh. 11C, P29, L16 - P30, L16 (OPC witness Alexander).
5
Significant here is that Judge Romine recognized that Major’s guarantee of cost savings is a
quantitative claim that can readily be verified and, hence, is clearly distinguishable from puffery
(PO at 11-16). Precedent supports Judge Romine’s ruling that Major’s guarantee of cost savings
is distinguishable from puffery:
Generalized, vague, and unspecified assertions constitute “mere puffery” upon which a
reasonable consumer could not rely, and hence are not actionable” under the [consumer
protection laws]. Puffery involves “outrageous generalized statements, not making
specific claims, that are so exaggerated as to preclude reliance by consumers.” “While
product superiority claims that are vague or highly subjective often amount to
nonactionable puffery, misdescriptions of specific or absolute characteristics are
actionable.”6
Thus, a car salesman’s claims that a specific car was “the most outstanding value” of all the cars
available for sale were not a violation of the ban on fraudulent trade practices in the Maryland
Consumer Protection Act (Commercial Law 13-101, et seq.) because these claims:
… were obvious examples of the kind of “puffing” and “sales talk” language that many
people have come to expect from car dealers. As we see it, this is the sort of speech that
is “offered and understood as an expression of the seller's opinion only, which is to be
discounted as such by the buyer and on which no reasonable [person] would rely.7
By contrast, Major made specific claims of guaranteed savings to persuade the consumer to
enroll as a new customer and, as noted, guaranteed savings are a quantitative (not a qualitative)
claim that can be readily verified by comparing Major’s price and the SOS price.
Major argues that its “terms and conditions as well as its sales and third-party verification
(“TPV”) scripts accurately describe the nature of the variable rate.” Presumably, Major is saying
that because its guarantees of cost savings in its marketing materials and in its actual phone
solicitations might not be reiterated in Major’s Disclosure Statement and contracts, or in Major’s
sales and TPV scripts, Major should not be held responsible for guarantees of cost savings made
6
7
(citations omitted) In re Ferrero Litigation, 794 F.Supp.2d 1107, 1115 (S.D. Cal. 2011).
(citations omitted) McGraw v. Loyola Ford, 124 Md.App. 560, 582 (1999).
6
in its other marketing materials and in its actual phone solicitations. However, as noted, Major’s
sales scripts do tell customers that they will realize savings. Also, as noted, many TPV calls
reiterated this claim of guaranteed savings. Moreover, the mere fact that a supplier’s
misrepresentations in some aspects of its marketing are not reiterated in all aspects of the
supplier’s marketing does not immunize the supplier from liability and other consequences
associated with the misrepresentations. This principle was embraced by the U.S. Court of
Appeals for the Sixth Circuit in granting summary judgement to the Federal Trade Commission
(“FTC”) in connection with its allegations of fraudulent marketing practices by a company that
used phone solicitations to sell debt-related products. In its decision in FTC v. E.M.A.
Nationwide (“E.M.A. Nationwide”), the court rejected the claim by the company (referred to
here as the Defendants) that the written materials that the Defendants sent to customers after the
phone enrollment cured the Defendants’ misrepresentations that were made earlier in the
enrollment process:
Although Defendants later provided written documents, including a contract that more
accurately characterized their services, there is no genuine dispute of material fact
regarding the net impression of Defendants' representations to consumers. A court need
not look past the first contact with a consumer to determine the net impression from that
contact, and a court may consider individual advertisements or messages to determine the
net impression. As the First Circuit has stated with regard to advertisements,
[e]ach advertisement must stand on its own merits; even if other advertisements
contain accurate, non-deceptive claims, a violation may occur with respect to the
deceptive ads. Disclaimers or qualifications in any particular ad are not adequate
to avoid liability unless they are sufficiently prominent and unambiguous to
change the apparent meaning of the claims and to leave an accurate impression.
Anything less is only likely to cause confusion by creating contradictory double
meanings. [E.M.A. Nationwide, 767 F.3d at 632-633]
The court’s reasoning in E.M.A. Nationwide indicates that regardless of the sequence of claims
made by a supplier in marketing its products, each claim “must stand on its own merits; even if
7
other advertisements [and other marketing materials] contain accurate, non-deceptive claims, a
violation may occur with respect to the deceptive ads.” E.M.A. Nationwide also indicates that
the Commission “need not look past the [supplier’s] first contact with a consumer to determine
the net impression from that contact, and a court may consider individual advertisements or
messages to determine the net impression.” Thus, the fact that the misrepresentations by Major
in some aspects of its marketing might not be reiterated in all aspects of Major’s marketing does
not immunize Major from liability and other consequences (including a penalty and other
remedial measures) that are justified due to the misrepresentations.
This FTC precedent is especially significant because the Commission looks to FTC
precedent for guidance in evaluating whether a supplier’s conduct violates the ban in the PUA on
“marketing, advertising, or trade practices that are unfair, false, misleading, or deceptive.”8 For
example, the Maryland Consumer Protection Act declares it to be “the intent of the General
Assembly that in construing the term ‘unfair or deceptive trade practices’, due consideration and
weight be given to the interpretation of 5(a)1) of the Federal Trade Commission Act by the
Federal Trade Commission (“FTC”) and the federal courts.”9
Major’s false guarantee of cost savings is a serious violation of COMAR and the PUA.
COMAR and the PUA require suppliers to fully disclose the pricing and conditions applicable to
the supplier’s products. In the April 1, 2014 Show Cause Order in this proceeding, the
Commission noted:
… Sections 7-505 and 7-507 of the Public Utilities Article require electricity suppliers to
provide adequate and accurate information to enable customers to make informed choices
regarding the purchase of any electricity services and prohibits an electricity supplier
8
PUA 7-505(b)(7).
Commercial Law 13-105; see Luskin's v. Consumer Protection Division (“Luskins”), 353 Md.
335, 352–54, 726 A.2d 702, 710–11 (1999); Greenfield, Michael M., Unfairness Under Section 5
of the FTC Act and its Impact on State Law, 46 Wayne L. Rev. 1869, 1905 (2000).
9
8
from engaging in marketing, advertising, or trade practices that are unfair, false,
misleading, or deceptive. [ML 153724, p. 2]
COMAR, too, requires suppliers to fully disclose the pricing and conditions of their products:
1) COMAR 53.07.07(A)(2) addresses electricity suppliers, and states that “A supplier may
not engage in a marketing or trade practice that is unfair, false, misleading, or deceptive.”
2) COMAR 53.07.08(d) requires that all electricity supplier contracts contain “a price
description of each service, including all fixed and variable costs.”
3) COMAR 59.07.07(A)(2) addresses gas suppliers, and states that “A supplier may not
engage in a marketing or trade practice that is unfair, false, misleading, or deceptive.”
4) COMAR 59.07.08(A)(2)(d) states all gas supplier contracts must contain “a price
description of each service, including all fixed and variable costs.”
5) COMAR 59.07.09(A)(1) states that “A supplier's price for service shall include all fixed
and variable components.”
The Commission has emphasized that the integrity of competitive markets requires that suppliers
provide accurate information about pricing.10 Major’s false claims of cost savings undermine the
integrity of the competitive market for electricity.
II. MAJOR FAILED TO DISCLOSE THE RISKS OF ITS VARIABLE PRICE PRODUCT
Judge Romine determined that Major failed to disclose the risk that Major’s variable
price could exceed the SOS price (PO at 16-17). In its appeal (pp. 4-5), Major asserts that it is
not required to disclose to customers the risks of its variable price product:
… there is no Maryland law that obligates retail suppliers to affirmatively communicate
to customers the risks of a variable rate. Under the COMARs, for example, a supplier
must provide a “price description of each service, including all fixed and variable costs,”
among many other material terms. Describing a rate as variable and potentially changing
each month based on specified factors satisfies the COMARs. The PULJ did not point to
any legal obligation to include the risks of a rate in the price description. In sum, Major
requests that the Commission reject the PULJ’s conclusion that Major was somehow
obligated to advise or warn prospective customers about the risks of variable pricing.
Major’s terms and conditions, scripts, TPVs, and training adequately and accurately
advise the customer about variable pricing, and there is no legal obligation to warn or
advise customers about risk. Moreover, case law supports Major’s position that the
statements made to prospective customers were not false or misleading. Without a false
or misleading statement by Major on which customers relied to enter into the agreement,
no penalty is warranted.
10
Starion, Order No. 86211, p. 3.
9
Major overlooks its duty to fully disclose the nature and risks of its products. In its 2014
rehearing decision in connection with its enforcement proceeding against an energy supplier
(Starion Energy PA, Inc. (“Starion”)), the Commission highlighted its authority to ensure that
suppliers fully disclose the pricing and other conditions that apply to the supplier’s products:
… although we do not have authority to regulate how Starion calculates its rates, we do
have the authority and obligation to regulate all of Starion’s marketing materials,
including how it describes its process for setting rates, to ensure that they are clear and
not deceptive or misleading. [Case 9324, Order 86531 (Aug. 7, 2014)]
By guaranteeing cost savings, Major failed to disclose the key risk of its variable price: the risk
that the price could exceed the SOS price. Major concedes that its sales materials do not
“incorporate[] the risk that Major’s variable price may exceed the utility’s price in its marketing
material.”11 Major’s sales materials also fail to disclose information on how Major determines
the variable price, including disclosure of Major’s reliance on a 30-day trailing average of costs
prices.12 Likewise, Major failed to disclose that the variable price reflects electricity costs that
Major did not recover in prior months.13 For example, Major recovered over several months its
losses due to the spike in wholesale electricity during the Polar Vortex in early 2014.14 Thus,
Major failed to disclose the risks associated with variable prices. Consequently, Major violated
its duty under “Sections 7-505 and 7-507 of the Public Utilities Article … to provide adequate
and accurate information to enable customers to make informed choices regarding the purchase
of any electricity services.”15
11
OPC Exh. 11A, BRA-2 (Major reply to Staff DR1-6).
Tr. 42, L 1-6, and Tr. 84, L 12-23 (Major witness Wiederman).
13
Tr. 239, L 15-21, and Tr. 241 (Major witness Sobel).
14
Tr. 241, L 1- Tr. 242, L 1 (Major witness Sobel).
15
April 1, 2014 Show Cause Order, p. 2.
12
10
III. THE MARYLAND UNIFORM ELECTRONIC TRANSACTIONS ACT
DOES NOT TRUMP THE SIGNED CONTRACT REQUIREMENT
Judge Romine determined that Major violated the signed contract requirement in the
Maryland Telephone Solicitations Act (“Solicitations Act”)(PO at 30-31, 37). Major argues that
the Electronic Transactions Act (“ETA”) trumps (or supersedes) the signed contract requirement
in the Maryland Telephone Solicitations Act (“Solicitations Act”)(p. 11). This is not true. The
Commission has recognized that the Solicitations Act applies to phone solicitations by energy
suppliers. The Commission pointed out in Starion that it:
… has regulatory requirements for telephone solicitation. These regulations state that all
telephone solicitations must comply “with all applicable State and federal laws, including
the Maryland Telephone Solicitations Act.” [Case 9324, Order No. 86211, p. 19]
Thus, the Commission has made it clear that phone solicitations by suppliers must comply with
the Solicitations Act. The Commission’s position is consistent with the principle that
requirements in different laws on the same subject should be interpreted in a manner that
effectuates the requirements of each law. Thus, a law should not be interpreted in a manner that
nullifies (or implicitly repeals) another law:
Statutes are to be construed harmoniously, and repeals which have not been expressed by
the General Assembly "will not be found unless demanded by irreconcilability or
repugnancy.”16
This principle indicates that the ETA does not nullify the signed contract requirement in the
Solicitations Act.
This conclusion is bolstered by the fact that when the Legislature intends an activity that
is regulated under one law to be exempt from the requirements of a different law, the Legislature
makes this clear in the law. For example, the Maryland Door-to-Door Solicitations Act
16
Subsequent Injury Fund v. Kraus, 301 Md. 111, 119 (1984).
11
expressly exempts from its scope certain activities governed by other laws.17 Consequently, if
the Legislature intended the ETA to trump the signed contract requirement in the Solicitations
Act, the Legislature would have adopted statutory language to make this clear. Instead, in the
situation here, neither the ETA nor the Solicitations Act contains language that states that the
ETA trumps the Solicitations Act’s signed contract requirement. This, too, indicates that the
ETA does not nullify the signed contract requirement.
This conclusion is reinforced by the principle that where there are multiple statutes that
can apply to a specific situation, the statute that specifically addresses the situation trumps the
statute that only generally addresses the situation. Put another way, "the specific statute is
controlling and the general statute is repealed to the extent of the inconsistency."18 The ETA “is
designed mainly to validate the development of technology and the uses of that technology by
business people that have outpaced the law's development ... .”19 By contrast, the Solicitations
Act was designed specifically to protect consumers in connection with phone solicitations, by
imposing the signed contract requirement. Thus, because of the narrow focus of the Solicitations
Act on phone solicitations (as compared to the more general focus of the ETA on electronic
contracts), the signed contract requirement in the Solicitations Act is not nullified by the ETA.
Also, the signed contract requirement ensures that before enrolling, a customer can
review a document (in the form of a contract) that explains all of the terms of the merchant’s
offer. This review ensures that the customer is providing its informed consent to buy the
merchant’s product. Thus, the Solicitations Act, not the ETA, addresses the consumer
17
Maryland Commercial Law 14-2601(d)(2)(footnotes omitted)
Starkey v. State, 147 Md. App. 700, 715; 810 A.2d 542, 551 (2002), quoting State v. Ghajari,
346 Md. 101, 116, 695 A.2d 143 (1997).
19
United States Life Insurance Co. v. Wilson, 198 Md.App. 452, n. 5 (2011),
quoting 1 Williston on Contracts §4:8, p. 529 (4th ed., Richard A. Lord, 2007) .
18
12
protections enshrined in the PUA and COMAR. For this reason, too, the ETA does not trump
the Solicitations Act.
The signed contract requirement is especially important in connection with Major’s
phone solicitations. Major’s contracts contain numerous important conditions of Major’s supply
service that are not included in Major’s script for phone solicitations, including:
1) the supplier’s right to curtail service due to “causes and events outside the control of
Major” (Major’s Sales Agreement, §11);
2) liability of each of the parties under the contract (Major’s Sales Agreement, §12);
3) the State law that will apply to any dispute regarding the contract (Major’s Sales
Agreement, §15);
4) the right of the parties to assign the contract to another person (Major’s Sales
Agreement, §5); and
5) the circumstances in which a party’s duty to perform pursuant to the contract is
excused (Major’s Sales Agreement, §11)
(Major’s Sales Agreement is in Exhibit I of Major Exh. 4). As noted, the Commission requires a
supplier to “disclose all material contract terms and conditions to the customer over the
telephone.” (Starion, p. 19). Because of Major’s failure to disclose in its phone solicitations
important conditions of Major’s supply service, the consumer could not give informed consent to
become a supply service customer. This underscores that Major’s violation of the signed
contract requirement undermines important protections for consumers.
Major asserts that even if it violated the signed contract requirement, a penalty is not
justified because “there is no evidence that any customers were harmed as a result of Major’s use
of a TPV rather than a wet signature for telephone contracts.” (p. 11). However, the Solicitations
Act states that a violation of the Act is “an unfair or deceptive trade practice under Title 13,
Subtitle 3 of this [that is, the Commercial Law] article.”20 Title 13, Subtitle 3 of the Commercial
Law Article is the Maryland Consumer Protection Act (“CPA”). Commercial Law 13-302 states
20
Commercial Law 14-2205.
13
that “any practice prohibited by this title is a violation of this title, whether or not any consumer
in fact has been misled, deceived, or damages as a result of that practice.” Thus, the
Commission can impose a penalty on Major due to its violation of the signed contract
requirement, even if there is no showing of harm to customers.
Moreover, Major’s customers were harmed by Major’s violation of the signed contract
requirement. As noted, the Legislature adopted the signed contract requirement to ensure that
before deciding to enroll, a customer could review a comprehensive, written explanation (in the
form of a contact) of the merchant’s offer. Thus, Major’s violation of the signed contract
requirement undermines this important consumer protection. This means that customers were
harmed by Major’s violation.
IV. A MARKETING MORATORIUM IS JUSTIFIED
Major challenges (p. 12) Judge Romine’s decision to impose a moratorium on Major’s
marketing variable price products until Major makes certain modifications to its sales of energy
products (p. 42). In view of Major’s pervasive improper marketing practices, a moratorium is
fully justified to ensure that Major takes appropriate remedial measures to correct these practices.
PUA 7-507(k)(1) expressly authorizes the Commission to impose a moratorium on marketing, in
response to a supplier’s improper marketing practices. Major asserts that “the proposed
moratorium on variable rate marketing should be eliminated because Major is no longer
marketing variable contracts.”(p. 14). However, because Major has the authority to offer
variable price energy products, Major could resume marketing a variable price product at any
time. Hence, it is essential that the Commission take action in this proceeding to ensure that
Major, in its marketing of its products, accurately reflect the terms of these products.
14
V. CONCLUSION
As demonstrated in this pleading, Major (1) misled customers by guaranteeing cost
savings; (2) failed to disclose the risks associated with variable price that the price could exceed
the SOS price; and (3) violated the signed contract requirement in the Solicitations Act. The
penalty and other remedial measures imposed by Judge Romine are fully justified. Hence, the
Commission should reject Major’s appeal, and should adopt the findings in the Proposed Order.
______________________________
Kenneth Marc Albert
Assistant Staff Counsel
Public Service Commission of Maryland
6 St. Paul Street, 17th Floor
Baltimore, Maryland 21202-6806
December 28, 2015
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT on this 28th day of December 2015, I e-mailed or mailed
(by first-class U.S. mail, postage prepaid) a copy of this pleading to all the parties on the Service
List compiled by the Commission in this proceeding.
______________________________
Kenneth Marc Albert
15