Pyramid Schemes A Black Eye for Power Retailing?

Fortnightly Magazine - May 1 1998
This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.

ON MARCH 26, JUST BEFORE IT OPENED THE STATE'S electricity market at midnight on the 31st, the California Public Utilities Commission announced new interim rules to protect consumers, plus this warning: "Any entity who is considering doing anything contrary to [state law] regarding electric restructuring, and [this] decision adopting such safeguards, should think twice."

Ostensibly, that advice followed from last year's passage of State S.B. 477, which told the PUC to adopt financial, technical and operational standards for electric service providers, and from reports issued by the PUC's Direct Access Working Group, which raised concerns about consumer protection.

However, it might also have had a bit to do with a certain college dropout, who rose from jewelry salesman to founder of what might have been one of California's largest electric resellers (em until the PUC suspended the business in February for "misrepresenting" services and savings to customers "through dishonesty, fraud and deceit," according to a PUC press release.

The new business, built by the 19-year-old Christopher Mee and his company, Boston-Finney Inc. of Harrisburg, Pa., allegedly sought to build profits by selling distributorships rather than electricity. Boston-Finney's activities, known as "multilevel marketing," also caught the attention of state attorneys general in California and Pennsylvania, who have filed civil complaints.

Nevertheless, Boston-Finney and other similar companies still believe that multilevel marketing has a place in power retailing, given the nature of the new electricity sales business, which promises confusion for customers and extremely tight profit margins on the product itself.

This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.