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Staff Files Recommendation In SmartEnergy’s Non-Compliance With Order; Recommends Adding Additional $15 Million Penalty; SmartEnergy Files Response
From Staff Comments:
Staff’s comments are in response to the Commission’s request for comments on Staff’s status report (ML#310759) on efforts to resolve issues concerning compliance with its orders in this case and on related filings. Staff has reported that those efforts have been undertaken and discussions have been held, but the parties are at an impasse. Staff recommends that Commission proceed to enforce its orders against SmartEnergy Holdings, LLC d/b/a SmartEnergy (“SmartEnergy”). Staff Comments have been filed in the docket of Case No. 9613. [ *** ]
SmartEnergy is in default of the Commission’s Orders, and Staff recommends that the Commission immediately draw down the $2.5m appeal bond and $250,000 security bond. Further, Staff recommends that the Commission again order SmartEnergy to rerate and refund all customers within 30 days as previously ordered and impose a civil penalty in the amount of the unpaid balance of any refunds at the end of the 30 day period. If no refunds are paid, the amount of the civil penalty should be entered at $15.97m in addition to the remaining rerate and refund obligation of approximately $15.97m.
From SmartEnergy’s response:
SmartEnergy Holdings, LLC, d/b/a SmartEnergy (“SmartEnergy”), pursuant to Sections 3-113(b) and 3-114 of the Public Utilities Article (“PUA”) and COMAR 20.07.02.08D, requests that the Maryland Public Service Commission (“Commission”) modify Order No. 89795 (the “Order”) to include the maximum refund and civil penalty dollars that SmartEnergy is able to pay based on an objective analysis of its financial position. As explained below, SmartEnergy’s financial information – all of which was provided to the Staff of the Commission (“Staff”) and the Office of People’s Counsel (“OPC”) in June 2024 – objectively supports a maximum payment by SmartEnergy of $3 million, which includes the current $2.5 million appeal bond which SmartEnergy backed with cash; the current $250,000 financial integrity bond; and $250,000 cash from SmartEnergy. [ *** ]
SmartEnergy cannot pay a $15.97 million refund and then return to the Commission for a civil penalty determination. Simply put, one cannot draw water from a rock. SmartEnergy’s proposal to lower the total compliance payment to $3 million is based on audited and other financial documents and loan agreements, which objectively demonstrate the company’s financial strength and ability to pay. Granted, $3 million is not $15.97 million; however, it is five and a half times higher than the highest payments made by any supplier in Maryland’s 25-year history of energy choice.
WHEREFORE, SmartEnergy respectfully requests that the Commission enter an order modifying Order No. 89795 lowering the total compliance payment from SmartEnergy to $3 million, consistent with the recommendations presented in this Motion.
Staff Comments (ML# 311430) (08/05/2024)
SmartEnergy Motion (ML# 311444) (08/04/2024)
9613 (05/10/2019)
(In The Matter Of The Complaint Of The Staff Of The Public Service Commission Against SmartEnergy Holdings,LLC D/B/A SmartEnergy)
