SmartEnergy To Refund $6.5M To Over 32,000 Maryland Customers

The Maryland Public Service Commission has ordered SmartEnergy Holdings to refund $6.5 million to more than 32,000 former customers, following a finding that the renewable energy supplier engaged in deceptive practices and violated state law.

The decision, issued Monday, gives the New York-based company 90 days to issue refunds to electric customers who enrolled by phone between February 2017 and May 2019. SmartEnergy did not respond to requests for comment.

SmartEnergy began operating in Maryland in 2017 but quickly drew consumer complaints, primarily from Baltimore Gas and Electric customers. In May 2019, a formal complaint accused the company of fraud, misleading marketing, and violating consumer protection rules. Some customers reported being enrolled without consent, a tactic known as “slamming,” and one complaint alleged a SmartEnergy representative falsely claimed affiliation with BGE.

The Public Service Commission found that SmartEnergy violated the Maryland Telephone Solicitations Act by enrolling customers over the phone without obtaining signed contracts. In 2021, the agency ordered SmartEnergy to cancel its Maryland contracts, issue refunds, and stop enrolling new customers in the state.

SmartEnergy challenged the ruling but lost appeals in both the Montgomery County Circuit Court and the state’s appellate and supreme courts. The company later sued the commission, claiming it had misapplied the law and imposed excessive penalties.

Originally, SmartEnergy estimated it owed customers $6 million. However, the Maryland Office of People’s Counsel placed the figure closer to $16 million. The company requested a reduced payout of $3 million, arguing that paying more would force it into bankruptcy. But the commission noted SmartEnergy had continued to make large payments to executives and investors during the period in question.

“SmartEnergy’s claims of poverty were undercut by the evidence,” the commission said, referencing a 2024 hearing where staff outlined continued distributions and bonuses despite mounting consumer liabilities.

To expedite relief for affected customers, the commission ultimately agreed to a $6.5 million refund.

SmartEnergy has also faced scrutiny in Ohio, where regulators found similar deceptive practices, including false rate promises, improper fees, and misleading rebate offers. In August 2023, the Ohio utility commission fined the company $122,000 and ordered it to provide customer credits and fulfill its rebate promises.

In April 2024, SmartEnergy surrendered its electricity supplier license in Maryland, citing the passage of Senate Bill 1 — a consumer protection law aimed at curbing misleading marketing by energy suppliers.

“These new rules make it unsustainable for SmartEnergy to market renewable energy products within the state,” the company wrote in a letter to the commission.

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Maryland Orders SmartEnergy to Refund $6.5 Million to Over 32,000 Customers  was originally published on r1wolbbaltimore.staging.go.ione.nyc