AG Kane investigating huge surprise jumps in electric costs because of "variable rates"

[JPZenger]

http://articles.mcall.com/2014-02-27/news/mc-variable-rate-electric-price-increases-watchdog-20140227_1_power-suppliers-price-gouging-variable-rates

When people are shopping for an electric supplier in PA, they typically have a choice between choosing a firm that has a fixed rate (such as for 12 months, at which time they can pick another supplier), or a variable rate. Some of the variable rate firms involve hard sales methods and may involve a deceptively low initial teaser rate.

Now, the variable rate plans are causing some customers to be surprised when their bills go up 500% this winter. Attyn Gen.Kane is now conducting an investigating of these huge rate jumps, and is asking affected customers to contact her office with their stories.

http://www.attorneygeneral.gov/press.aspx?id=7535

Excerpt:

On Wednesday, the state attorney general's office said it will investigate whether people were overcharged, noting that price gouging is prohibited during the state of emergency declared by the governor Feb. 5.

"These spikes in the price of electricity are alarming and have put many consumers, especially the poor and elderly, in a dire situation," Attorney General Kathleen Kane said in a statement.

The state Public Utility Commission acknowledges the hardship these high prices have caused and last week ordered a review to see what can be done to ensure customers are protected and power suppliers are operating fairly.

... shop around for a better price. You can start at http://www.papowerswitch.com. But don't just pick a supplier and forget about it. If you do, you eventually could end up in the same position.

The prices advertised by many companies are limited-time introductory rates that will convert to variable rates in a few months. You can sign up for longer-term fixed rates, but your rate often will become variable when that contract expires, too."

[Curmudgeoness]

1. Yep, let's open up the utilities to the free market.

Shut down those monopoly electric companies. Allow every sleazy company come into the state and screw the citizens here. This will be SO much better for the consumer.

No one can be an expert in everything that we are being expected to manage ourselves anymore, not just buyers of utilities, but readers of contracts written in legal terms by well-paid and well-educated lawyers. We already have to know all about economics and finances to learn how to invest for our retirements. We need to know all about insurance to make the right decision for our health care. How are we supposed to do all this? The free market, untethered by all the regulations the PUC had to protect us, is going to harm us......it always does, even if it backfires in the end. The end never comes soon enough.

[JPZenger]

2. It is not hard to make a smart choice

First, hang up on telemarketers and don't talk to door to door salesman.

Go on the official state website and look for the company with the best FIXED rate for the next 12 months. Then 12 months later do the same thing, with a different company if appropriate.

[Curmudgeoness]

3. I have not even heard of a website.

I do admit that I live in an area where the only local news we get is from Ohio, so they do not cover PA well at all. But even my local paper either didn't report a website, or I missed it. Or, hell, is it on my bill somewhere is all the fine print????

Since I work in Ohio, I have used their website for the utilities in Ohio, and it is a great site to use....called Apples to Apples and the comparisons have no mumbo-jumbo involved. The rates are all just what it says, apples to apples. Is the PA site easy to grasp?

[JPZenger]

4. Here's the site

http://www.papowerswitch.com/shop-for-electricity/

This is the official site. You click shop for home, type in your zip code, and then click sort by lowest price. Then you look for the lowest fixed price (for 12 months in most cases) , not lowest variable price. All of your choices are clearly listed.

[Curmudgeoness]

5. Thank you.

Looks like my utility is about as low as it gets. Just one that is a couple cents lower.

But it is good to know. And yes, this is easy to use.

[wcast]

6. This post came at the right time.

My mother-in-law was upset as she just got an $800 electric bill from PG&E. She didn't understand she had even signed up for this over the phone and that it was a variable rate. Because of this post I was able to give her helpful advice.

[JPZenger]

7. People try to change from rip-off company and told they have to wait another month

One of the problems described in the news article involves people who get a huge bill. They then try to switch to a cheaper provider, and are told they won't be changed for another month (and another budget-busting bill).

[durablend]

9. Even a fixed rate doesn't help

Once the contract is up, said company can stick you on a variable sky high rate which you're stuck on until you can get switched to another company (month or two)

[JPZenger]

8. 2,600 complaints filed so far, most of them in the last week

http://www.pennlive.com/midstate/index.ssf/2014/03/complaints_about_high_electric.html#incart_river

[durablend]

10. SB 1121 killed off

That would've auctioned off people that were still using their default supplier. Said Republican legislator claimed he would "rewrite" the bill after numerous complaints (though he 'claims' the intentions of the original bill were 'misconstrued' and weren't reported correctly--where have we heard that before?).

Interesting how a couple of electric companies were also backers of the bill. IIRC, the same companies that were some of the ones ripping people off. What a coinky-dink, don'tcha say?