Electric Rate Violation Cases in PA

Consumers take care when entering the world of deregulation and shopping electric rates. Taking advantage of the options of deregulations is not all about price and working with a licensed, experienced broker can save you from future headaches.

Five retail electric suppliers in PA are at risk of license suspension or revocation due to alleged deceptive practices and other violations. Complaints filed with the PUC by the Pennsylvania Attorney General and Office of Consumer Advocate are against Blue Pilot Energy LLC; Energy Services Providers Inc. d/b/a Pennsylvania Gas & Electric (USG&E); Hiko Energy LLC; IDT Energy Inc. (who has denied the allegations); and Respond Power LLC. The violations of certain PUC codes include: deceiving or untrue savings guarantees especially versus the PTC, disclosure language inadequately stating the terms of potential price variability, prices charged were inconsistent with suppliers’ disclosure statements, violation of the state’s Telemarketer Registration Act, customers unable to reach suppliers to address complaints, in addition to other allegations specific to one or more suppliers. The PA AG is pursuing license suspension or revocation and refunds to customers.

The PUC has previously ruled that it does not have jurisdiction to enforce violations of the Unfair Trade Practices and Consumer Protection Law though the AG broadly alleges they occurred in this case.

A case involving alleged slamming, Do Not Call violations, and other marketing violations against ResCom Energy LLC has reached a proposed settlement with the PA PUC. Under the terms, ResCom Energy LLC would be required to pay $59,000.

These previous examples are of actual violations. What needs to be kept in mind is that the PA PUC may not regulate the rates charged by electric generation suppliers. In reaction to a customer complaint against Blue Pilot Energy LLC, a judge concludes the Commission has no jurisdiction over suppliers regarding that an EGS has charged it an “unreasonable, unjust or illegal” rate for electric generation service. After an initial three-month period, the customer’s electric rate increased from about 8¢ to 39.99¢. Though a shocking increase in rate to the customer, the ALJ’s decision was in favor of Blue Pilot as no violations of PUC code or law are alleged or sustained.

“Since the Commission lacks the authority to regulate rates charged for electric generation service, it lacks the authority to order a refund or credit to the Complainant,” the ALJ said.

The recent AG complaints against several other suppliers are based not specifically around high rate amounts but rather allegedly in violation because they are marketed as being “competitive.”

The “competitiveness” cannot be measured solely again the default service rates. So the AG included an analysis finding that EGS rates based on PJM spot prices should not have exceeded 23¢.

Regarding the specific customer complaint against Blue Pilot, the disclosure statement and agreement indicated that the initial price would be for a period of 90 days. Consumers must be very careful and read the contract terms and fine print of their agreements. This is why having an expert in the field advise you is of utmost importance

“After ninety days the disclosure statement and agreement provides that the price could vary on a month to month basis due to several factors, including the cost of wholesale electric market prices. The disclosure statement and agreement contains no cap on the amount by which the rate could increase,” the ALJ said, concluding that the 39¢ rate was therefore not in violation of any disclosure statement received by the customer.

Make sure you have a high volume broker with deep experience such as Better Cost Control guide you through the buying process to avoid any surprises. We work for you not the energy suppliers and are experts at navigating potential energy suppliers. Do not get blinded by seemingly very attractive rates.