Electric Bill Surge Raises Questions

By Jeff Stoecker
|  Thursday, May 16, 2013  |  Updated 1:03 AM EDT
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Ann Palmisano called the Troubleshooters when she switched electric companies to save money, only to have her electric bill increase.

Ann Palmisano called the Troubleshooters when she switched electric companies to save money, only to have her electric bill increase.

Ann Palmisano says the offers came from different companies and they came often; phone calls from different power companies promising big savings. Palmisano is an accountant. She keeps the books at her husband’s chiropractic practice in Bristol, and decided to make the switch hoping for a good deal.

“Oh it sounded great. Too good to be true actually,” said Palmisano.

When she got the March bill, Palmisano was surprised to find that her electric generation rate jumped from just over 10 cents per kilowatt hour in January to over 19 cents in February.

“I thought there was a mistake,” said Palmisano. “I thought there had to be a mistake because how can anything go up… even gas doesn’t go up 87% in one month.”

When Palmisano made the switch to Connecticut Gas & Electric, she was under the impression that the company had roots here in CT. What she found is that parent company is U.S. Gas & Electric based out of North Miami Beach, FL. The company uses the state’s name in each the 11 states where they operate. In Pennsylvania, they go by the name Pennsylvania Gas & Electric. Palmisano says with CT in the name, she thought it was a local company. It’s all perfectly legal, and some would argue even great marketing.

“Whether we’re local or not is not really that important,” said Doug Marcille, President and CEO of U.S. Gas and Electric.

When asked if using the name Connecticut Gas & Electric implies they are somehow based in the state, he said no. “It just means that we’re selling electricity in CT using that brand.”

Marcille says his company’s business model is to buy electricity for the current market price, unlike companies that establish a fixed rate by making bulk purchases in advance. He says that ultimately allows customers to save over the long term.

He also blames the February rate spike on winter weather conditions, and says Palmisano left his company too soon to realize savings.

“It’s the people that are trying to time the market, who have months and months and months of savings, and then all of a sudden get a bill that’s over and leave that don’t get the benefit of the program,” said Marcille.

But the Troubleshooters compared what Palmisano paid with Connecticut Gas & Electric, and what she would have paid with CL&P. In all but two months, she paid more with Connecticut Gas & Electric, and in February nearly triple.

Connecticut Gas & Electric is one of dozens of companies operating in CT. Deregulation in 2000 opened the door to third party suppliers. They provide options beyond the default companies already operating in CT - CL&P and United Illuminating. Some of these companies offer green energy options while others promise savings. According to the Public Utilities Regulatory Authority, or PURA, since deregulation, 48 percent of customers in the state have switched to a third party supplier. Consumer advocates warn it’s a buyer beware marketplace.

“Consumers really need to be vigilant,” said Elin Katz with the Consumer Counsel. “They really need to read the fine print.”

Katz points out that one company can have several options, and sorting through them can be confusing. In some cases, a supplier will have a fixed rate that consumers can expect. Others will offer teaser rates that last from one to several months, but then those rates can vary after those initial offers expire. Some companies are completely variable, allowing for the potential for large swings in rates.

“You may get a short term savings, but if in the long term it takes you a few months to realize your rate has basically doubled like that, any short term savings you’ve seen is easily eaten up,” said Katz.

PURA is currently taking a closer look at two companies - Public Power and North American Power and Gas. The attorney general is investigating Energy Plus. All three inquiries revolve around a tactic known as bait and switch – lure customers with low teaser rates only to have those rates spike later.

Public Power never returned our calls. North American Power sent us a written statement saying “We look forward to working with PURA to show we've acted within both the letter and spirit of Connecticut regulations.”

A spokesperson for Energy Plus tells NBC Connecticut “It is not our intention to be the lowest cost provider. We are interested in giving customers a choice, customers who want to get more from their electric bill than just paying for electricity.” Their spokesperson went on to tell us that they offer incentives like airline miles, hotel points, and cash back rewards. Energy Plus is also facing a class action lawsuit which claims the company’s advertised rates were misleading.

PURA is warning customers to be vigilant, and power suppliers to stay within the state’s regulations.

“Do not, do not be deceptive to the customers, the rate payers, because those are things that are going to be taken quite seriously by us as regulators,” said PURA Vice-Chairman John Betkoski.

Lawmakers in CT are considering several new regulations to protect consumers. One would require all electric suppliers to give customers three weeks advance written notice if their electric generation rate is about to go up.

Ann Palmisano did end up getting a rebate for that price spike from Connecticut Gas and Electric. Still, she decided to switch to another company with a fixed rate. She says she’s learned when it comes to her electric bill, not all deals are what they seem.

“I think it’s the opposite of what consumers expected,” said Palmisano. “We expected it to be more economical for us, just a better overall situation.”
 

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