Deregulated Energy Company Fleeced Consumers Out of $100 Million, Class Action Claims

Independent electricity brokers misled consumers about deregulated energy prices, taking advantage of them in the process, a Maryland woman claims.

Lead plaintiff Angela Glikin claims that she switched from her local utility to the predecessor of Major Energy Electric Services, an independent company that was allowed to broker electricity services under deregulated energy markets starting in 1990. Gliken says that she paid approximately twice as much as she would have been charged under her local utility rates.

Gliken is accusing Major Energy of price gouging her and other consumers in a recently filed class action lawsuit claiming $100 million in damages.

In the 1990s, states began to “deregulate” their energy markets. While local utilities were responsible for the production and/or delivery of electricity to consumers, in a deregulated energy market consumers can purchase electricity from an independent company that has no role in production or distribution.

Deregulation was touted as a way for companies to compete on prices and, as a result, consumers were supposed to pay less; however, Gliken claims that companies like Major Energy Electric Service duped consumers into price structures they didn’t understand and charging them far more than their local utility.

“Some unscrupulous energy suppliers, like Major Energy, have exploited deregulation by deceiving customers hoping to save on their residential energy costs,” the lawsuit alleges that accuses Major Energy of engaging in practices “designed to profiteer at the expense of the consuming public.”

The class action lawsuit alleges that deregulated energy companies used variable rates to subject consumers to ever-increasing prices while claiming their rates were competitive. Consumers would be enticed into the variable rate plan by an initial, low fixed rate. Major Energy would allegedly tell consumers that the variable rate would be based on competitive market rates; however, the class action lawsuit claims that the rates were not tethered to the market. Instead, consumers paid much more than the local utility rate.

“No consumer would ever agree to Major Energy’s variable rate if they knew the truth,” the lawsuit alleges.

Deregulated energy brokers have faced legal and regulatory action in several states, according to Westchester & Fairfield County Business Journals. An investigation in New York reportedly found that between 2014 and 2016, residential customers were bilked out of paying $1.2 billion more by independent energy companies than they would have paid for service from their local utilities.

Gliken seeks to represent other Major Energy customers in the United States. The class action lawsuit alleges fraud, unjust enrichment, deceptive practices, and breach of contract.

Have you paid higher electricity bills from an independent energy broker? Are you concerned about deregulated energy prices? Tell us in the comment section below!

Lead plaintiff, Angela Glikin and the proposed Class Members are represented by Steven L. Wittels, J. Burkett McInturff, Susan J. Russell, D. Greg Blankinship, and Chantal Khalil.

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