Chances are high that you’ve run across someone in your lifetime that is involved with a network marketing business. Also known as multilevel marketing, companies like Avon, Amway and Pampered Chef employ a fleet of individual consultants to sell their products and recruit new consultants. While personal care and kitchen products are mainstays of the network marketing industry, new opportunities are emerging including opportunities in the renewable energy industry.
One of these green energy network marketing organization is North American Power. North American Power allows its customers to purchase wind renewable energy certificates (REC) to help offset their monthly energy use. While the consumer won’t be powering his home directly with wind power, the money used to purchase RECs helps fund wind farms across the nation.
Sounds great, right? Unfortunately North American Power is running into some snags that are common in the network marketing industry including unhappy customers, confusion about the product and even regulatory woes.
When you sign up with North American Power you pay a flat monthly fee for your RECs. However, most people sign up in order to turn around and build a downline, thus generating an income stream. This means that you need to take off your friends and family hat and put on your salesperson hat. While some people are extremely successful in the network marketing industry, I know more people that have simply alienated themselves by continually pushing the product. This is one way that unhappy customers are created.
Another way that unhappy customers are created is through a more direct approach. In some markets, North American Power can be a consumer’s primary electric company. Earlier this year, Jay Hancock described an encounter he had with a North American Power representative in an article for The Baltimore Sun
“The woman who says she represents North American Power is not telling the truth about the benefits of buying electricity from her company. "You can save up to 10, 15, 20 percent of your bill, depending on your usage," she says in a telemarketing call to my house. But the rate she eventually quotes is only about 7 percent less than the standard price offered by Baltimore Gas & Electric — something the average customer would have no way of knowing.”
These claims, along with other concerns including a look-alike website, prompted regulatory complaints against North American Power. In January, the Public Service Commission of Maryland filed a formal complaint against North American Power and the issue was resolved in June.
According to the June 9, 2011 order
(PDF), “In this Order, the Maryland Public Service Commission (the “Commission”) finds that North American Power and Gas, LLC (“NAP”) engaged in multiple practices that violate State law and Commission regulations. As a result, and based on the factual findings detailed below, we impose a civil penalty of $100,000 and require NAP, as a condition of retaining its license to sell electricity and electricity supply services, to undertake certain remedial measures to ensure full regulatory compliance going forward.”
Despite the consumer complaints and the regulatory actions, I’m sure there are happy North American Power customers and successful network marketers building their downlines. However, as is the case with any new business venture, if you’re looking at getting into the renewable energy network marketing business make sure you do your homework before investing anything more than your time.