Overbilling Complaint Against Electricity Maine Could Turn Into Class-Action Lawsuit

Lawyers suing competitive retail supplier Electricity Maine over the company’s billing practices are closing in on asking a judge to allow them to pursue a class-action lawsuit, which would enable them to seek millions of dollars in damages, the Portland Press Herald reported on March 28.

The lawsuit, filed on behalf of customers Katherine Veilleux and Jennifer Chon, alleges that Electricity Maine promised customers to charge no more than the “standard offer” price for electricity – but then increased the rates sharply after an initial period with lower rates.

They plaintiffs may seek damages of $35 million if the case moves forward in the U.S. District Court in Bangor.

Tom Hallett, one of the lawyers representing the two Maine women who have sued the electricity provider told the Portland Press Herald on March 27 that lawyers currently are waiting for a ruling from the court on a motion to dismiss the case by one of the defendants. If that is rejected, he said, the lawyers on the case should be able to ask for class-action certification soon thereafter – enabling thousands of area customers to seek damages as a group.

Hallett told the local news outlet that damages of $35 million represent “what we’ve found so far,” adding that the amount being sought could change as lawyers go through Electricity Maine’s records and seek to expand the number of plaintiffs.

Electricity Maine sells to businesses and homes served by the regulated utilities Central Maine Power and Emera Maine

Hallett told the newspaper that Veilleux and Chon are not commenting on the case.

Electricity Maine was one of the first electric supply companies in Maine to attempt to sign up large numbers of residential electricity customers after the state deregulated the electricity market in the early 2000s. In the first few years after deregulation, most electric suppliers went after large industrial companies instead of individual homeowners, because it was easier to work out a deal and oversee the contract with a few big customers rather than thousands of smaller accounts.

Electricity Maine’s advertising at that time said its charge for electricity would never exceed the standard offer – the price set by an electric supplier and approved by the Maine Public Utilities Commission for customers who don’t designate a supplier – said Ben Donahue, another one of the lawyers suing Electricity Maine.

“That was clearly unsustainable,” Donahue told the Portland Press Herald. He said that Electricity Maine had spent a lot of money trying to attract customers with advertising and marketing between 2011 and 2014 – however, after an initial period during which the rates were below the standard offer, the bottom line jumped. Often, by as much as 50 percent.

At that point, he said, the retailer went into survival mode.  “They had to raise the rates to recoup [the] money” that they spent to sign up customers, Donahue explained.

Donahue said about 1,000 people have contacted his law office since the lawsuit was filed last fall to follow its status and see if they could join a class-action suit. Donahue said his firm is sending out regular newsletters to those who have contacted the office to keep them up to date on the progress in the case.

The lawsuit names Electricity Maine and its parent company, Provider Power [dba Spark Holdco], a Texas-based firm that bought Electricity Maine in May 2016; and Kevin Dean and Emile Clavet, top executives at Electricity Maine.

Spark Holdco has filed the motion to dismiss the case, saying the plaintiffs have failed to demonstrate that they have an actionable claim under the law, according to the local news outlet. A hearing on that motion is likely to be held this spring.

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