The Maryland Public Service Commission has ordered the refund of $6.5 million to more than 32,000 former customers of SmartEnergy Holdings.

The Monday decision comes after the commission concluded that the New York City-based renewable energy supplier misled and deceived customers and violated a Maryland law.

The company has 90 days to refund its electric customers who enrolled by telephone between February 2017 and May 2019.

Representatives for SmartEnergy did not respond to requests for comment.

SmartEnergy operates in 11 states and Washington, D.C. The company became a supplier in Maryland in 2017, but within two years customers were filing service complaints with the Maryland Public Service Commission.

A May 2019 complaint accuses SmartEnergy of “committing fraud and engaging in deceptive practices,” as well as “failing to comply with the Commission’s consumer protection regulations.”

Initial complaints were submitted by Baltimore Gas and Electric Company customers, said Tori Leonard, a spokeswoman for the Public Service Commission.

At least two of four complaints accused SmartEnergy of “slamming,” the practice of signing up consumers for programs without their consent.

Another complaint claimed a customer service representative at SmartEnergy incorrectly asserted that the company was affiliated with BGE.

SmartEnergy disputed most of the complaints.

In 2021, the Public Service Commission ordered the company to cancel contracts and refund customers — and prohibited it from adding or soliciting new customers in Maryland.

The commission also found that SmartEnergy violated the Maryland Telephone Solicitations Act when it enrolled customers over the phone and did not obtain signatures for those contracts, according to filings from the commission’s staff.

SmartEnergy appealed and lost its case in Montgomery County Circuit Court, the Appellate Court of Maryland and the Maryland Supreme Court.

The company filed a lawsuit against the Public Service Commission in August, accusing it of distorting laws on telephone sales and applying excessive penalties that would put the company out of business.

Before the appeals process, SmartEnergy estimated it owed $6 million to customers. But the Maryland Office of People’s Counsel, a state ratepayer advocacy agency, believed the amount was closer to $16 million.

SmartEnergy said paying out $16 million would bankrupt it and requested to limit what it would have to pay in refunds to $3 million, according to a Public Service Commission statement on Monday.

“SmartEnergy’s claims of poverty were undercut by the evidence of its payments to company insiders and investors of millions of dollars during the period in question,” the statement reads. “During an August 14, 2024 hearing, commission staff argued that SmartEnergy continued to pay out millions in distributions, salaries, and bonuses, while at the same time ignoring the company’s liability to Maryland consumers.”

To avoid delays in refunds for ratepayers, the commission said it agreed to a payout of $6.5 million.

SmartEnergy customers in Ohio made similar complaints, and an investigation by the Public Utilities Commission of Ohio found the company was providing misleading and deceptive information.

According to the Ohio commission, SmartEnergy told customers they would be protected from rate increases, could claim gift cards they weren’t eligible for, charged “extremely high variable rates” and didn’t provide customers with proper notice for contract expirations, among other issues.

The Ohio utility regulator fined SmartEnergy $122,000 in August 2023 and ordered the company to issue credits and honor rebate incentives that it promised to customers upon their enrollment.

SmartEnergy surrendered its Maryland electricity supplier license in April 2024, citing the passage of Senate Bill 1, a consumer protection law that supporters said would stomp out deceptive marketing tactics by energy suppliers.

“These new rules make it unsustainable for SmartEnergy to market renewable energy products within the state,” a letter to the Public Service Commission reads. “After extensive evaluation, it has become clear that withdrawing from the Maryland market is the most prudent decision for our company.”