Considering Complaints in the Energy and Gas Industries

At the August 29 meeting of the Senate Committee on Education, Energy, and the Environment (EEE), the Maryland Public Service Commission (PSC) provided an overview of the regulation of Maryland’s energy and gas industries. During the meeting, the commission shared the raw number of consumer complaints it periodically receives.

Missing from this presentation of raw data was a sense of proportion; absent context, legislators and the public are left wondering whether the numbers the PSC shared indicate a problem or if they are in line with historical trends. More helpful would be a reporting on the ratio of complaints to the total number of customers served, as well as an analysis to determine how many of these complaints were justified, so that the audience would have a point of reference. Having reviewed the data from that perspective, we believe this information would have been incredibly useful to the committee members and would have revealed an overall healthy retail market.

The data show that since January 2022, on average just two in 10,000 shopping customers (equal to 0.02%) registered a complaint with the PSC each quarter. By comparison, an almost equal number – 1.7 in 10,000 customers – registered a complaint with the PSC against BGE in the two quarters for which data is available on the PSC’s website. We are unable to determine how many of these complaints were justified, as the PSC’s reporting provides no such analysis.

While the raw number of complaints may attract attention in reports and headlines, the more accurate takeaway from the PSC’s complaint data is that the number of dissatisfied shopping customers has remained exceedingly small and relatively constant since at least the beginning of 2022.

Consumer complaints are part of any industry. But to judge the health of the market, complaints need to be viewed in context and over time to ascertain if there is an anomaly at play or an underlying market bigger trend that warrants investigation. Complaint-to-shopping ratios allow the PSC to identify possible problems and probe to learn more. Complaint-to-shopping ratios also enable retail suppliers to monitor their own performance and improve their operations.

Equally important to discerning the health of the market is making a distinction between total complaints versus justified complaints – those that, after investigation, represent an actual violation of the Commission’s rules. Prior to 2022, the Commission published data that showed the outcome of customer complaint investigations – they noted whether the PSC found in favor of the customer or the supplier. It is not clear why this type of reporting was discontinued. It is noteworthy that the Pennsylvania PUC recognizes the importance of both the complaint-to-shopping ratio and the identification of justified complaints – both of which they report annually.

While Maryland’s Public Service Commission provides data about complaints against suppliers, further analysis that shows the number of justified complaints and the proportion of these complaints to all customers served is essential to understanding the health of Maryland’s retail energy markets. Such information would provide stakeholders with a clear picture of what is happening in the industry and provide insights into possible improvements.

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