Electricity Maine Class Action Says Company Falsely Promised Savings

Electricity Maine LLC has deceptively promised significant cost savings to nearly 200,000 Maine households and businesses enrolled in its energy services, according to a class action lawsuit filed this month in Maine federal court.

“Instead of decreasing consumers’ electricity bills, however, Electricity Maine, through Defendants’ fraud and deception, cost Maine ratepayers at least $35 million,” plaintiffs Katherine Veilleux and Jennifer Chon allege in the Electricity Maine class action lawsuit.

Provider Power LLC, Spark HoldCo LLC, and two controlling members of Provider Power are also named as defendants in the Energy Maine class action lawsuit. Until May 3, 2016, Electricity Maine was wholly owned by Provider Power. They reportedly operated as separate corporate entities under the name Electricity Maine until Spark HoldCo purchased all outstanding membership interests in Electricity Maine from Provider Power on May 3, 2016.

The plaintiffs assert that until 2000, Maine’s electric power industry was dominated by regulated utilities who “enjoyed a complete vertical monopoly in the generation, transmission, and supply of electricity to Maine consumers and businesses.”

In 2000, the Maine legislature reportedly enacted The Restructuring Act, which permitted private, non-regulated companies to compete with utility providers in the electricity supply market. Utility suppliers continued to supply electricity services to consumers and businesses by providing standard-offer service, which guarantees Maine ratepayers a fair rate (approved by the Maine Public Utilities Commission) for electricity services.

The competitive electricity providers initially saw the market for residential and small business services as unprofitable and found that it was difficult to enter the market. According to the Electricity Maine class action lawsuit, competitive electricity providers held only 0.05 percent of the residential supply market. However, less than two years later, Electricity Maine reportedly converted nearly 200,000 customers to its services—nearly one-third of the Maine residential and small business electricity supply market.

This success was supposedly due to Electricity Maine’s innovative marketing techniques and business model. The class action lawsuit states that Electricity Maine promised to beat the utility providers’ standard-offer price and represented to its potential customers that “there is no catch, no gimmicks” and insisted that its low rates were not “too good to be true.”

Veilleux and Chon assert that Electricity Maine’s rates were in fact “too good to be true” and that the company’s success was only possible by defrauding customers. According to the class action lawsuit, Electricity Maine lured customers with the promise of price savings but then, after providing their services at “artificially-low promotional rates,” the company would transfer customers to significantly higher rates with little or no notice. Customers could not escape these higher prices without paying a $100 early termination fee, the plaintiffs state.

The plaintiffs filed the class action lawsuit on behalf of themselves and all Electricity Maine residential and small business customers who enrolled in Electricity Maine’s electricity supply services prior before Mar. 8, 2013. They assert claims for violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), violation of the Maine Unfair Trade Practices Act, negligence, negligent misrepresentation, fraudulent misrepresentation, unjust enrichment and breach of contract.

The plaintiffs are represented by Thomas F. Hallett, Timothy E. Zerillo, David A. Weyrens and Benjamin N. Donahue of Hallett Zerillo & Whipple PA, and Robert P. Cummins of The Cummins Law Firm.

The Electricity Maine Class Action Lawsuit is Katherine Veilleux, et al. v. Electricity Maine LLC, et al., Case No. 1:16-cv-00571, in the U.S. District Court for the District of Maine.