Soaring wholesale gas prices this winter have forced two Maryland retail gas marketers to cut services to some or all of their customers. The Maryland Office of Peoples Counsel (OPC) has issued a consumer alert regarding the gas suppliers, Maryland Natural Gas & Electric/Operators Energy Services and ACN Energy.

The OPC filed a complaint last week against Operators Energy for dumping its 1,200 gas customers without providing the required 60-day notice and allegedly without providing adequate reason under its one-year customer contracts. ACN told its 800 customers in Washington Gas Light’s utility service territory that it plans to exit the business on May 20.

The OPC is asking the Maryland Public Service Commission (MPSC) to revoke Operators Energy’s electricity and gas licenses, impose civil penalties on the company and order it to pay refunds to customers for higher natural gas costs because the company suddenly exited the business after being negatively impacted by recent wholesale gas price spikes and unusually strong gas demand.

OPC said that Operator’s Energy adversely impacted residential customers by returning them to the utility at precisely the time when natural gas prices are at an all-time high.

Operators Energy notified its gas customers on Feb. 24 that it was exiting the retail gas business effective March 1. There was no disruption of service for Operators Energy customers, who continued to receive gas deliveries from their local utility. However, customers were charged the utility’s higher cost of gas supply, 73.6 cents/therm for Baltimore Gas & Electric and 97.3 cents/therm for Washington Gas Light in March, compared to the 54.5 cents covered under their one-year agreements with Operators Energy, the OPC told the MPSC in its complaint. The retail marketer also never formally notified the commission of its plan to exit the business.

“Residential customers, including but not limited to Richard Lelonek, whose gas supply contracts were prematurely terminated, lost the protection against price volatility and price increases that is provided by a long-term fixed price contract,” the OPC told the commission. “These customers not only lost the benefit of entering into long-term fixed price contracts with Operators Energy, but incurred a loss as a result of the higher price charged by the regulated gas company for each therm of gas used by those customers as of March 1, 2003.”

The OPC said ACN Energy, a supplier of natural gas services to customers in the Washington Gas service territory, on May 20 also will subject its customers to the utility’s pass-through cost of gas supply, which could be higher than the rate they were paying ACN. In its formal notification to the commission on Monday, ACN actually asked if it could turn back its customers to Washington Gas sooner than the required 60 days. It said it will continue to serve customers in the Baltimore Gas & Electric service territory.

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