NEW MILFORD, Conn. – When Gretchen Mastrogiannis received a call promising a low, fixed rate for electricity last winter, she jumped at the chance.
She and her husband run Theo’s Downtown Diner, and a lower electric bill meant a better bottom line for her small business.
But the moment she opened her first bill, Mastrogiannis said she realized something was wrong: The rate was double what she’d been promised. In the ensuing months, her rate shot up to more than five times what she was expecting, she said, costing her thousands of dollars.
“Everything over and above what I would have normally paid came out of my pocket, personally, because that’s how small business owners make their living," Mastrogiannis said. "Whatever is left is what you get."
Connecticut is one of 15 states with deregulated electricity, meaning third-party suppliers can get into the game. The utility is still responsible for delivering the electricity, maintaining and repairing the power lines and reading the meters. But while utilities offer fixed rates per kilowatt-hour, third-party suppliers can buy electricity wholesale and sell it directly to consumers at variable rates that, in theory, are pegged to the market.
The goal of deregulation is to lower prices by increasing competition, and would-be electric suppliers have swarmed Connecticut trying to win business with telemarketing calls, door-to-door sales and advertisements. Their tactics have sometimes crossed the line, resulting in thousands of complaints to the state’s Public Utilities Regulatory Agency.
Elin Katz, who heads the state’s Office of Consumer Counsel, said electricity suppliers have preyed on the elderly and low-income groups with sales pitches that are often confusing and sometimes intimidating.
“There’s reports of them saying things like, ‘I’m from the electric company and you need to make a change, or the governor wants you to switch. Really outrageous claims,” Katz said. “Consumers are being misled on who they are even talking to.”
Bristol resident Russ Drachenberg said he was happy with his third-party electricity supplier so he was surprised when the company called.
“They said, ‘Why did you stop utilizing us?’" Drachenberg recalled. "And I said, ‘I didn’t stop.’ They said, ‘Well you’re signed up with another company.’”
The retired state employee said he’d been “slammed” by a telemarketer, meaning he was switched to another electricity supplier without his permission.
This is United States of America. People come here because things like this should not be happening because we are protected under law. Sometimes I do question that: How protected are we?
former third-party electricity customer
In addition to the aggressive pitches, some are outright deceptive. Connecticut reached a $4.5 million settlement with Energy Plus last year, following allegations that the company promised to save customers money and then charged them as much as double the market rate. Money from the settlement will go for enforcement of the state’s electricity supplier laws and for consumer education and assistance. Energy Plus admitted no wrongdoing.
I lost hundreds of dollars to the ‘free market’ for electricity
The night after we first aired our Power Profiteers report, I found myself guilty of failing to read my electric bill. Between juggling a career and parenthood, there are too many other things happening to let my electric bill take up too much of my thinking. I mean, you just pay it, right?
A few years ago, I vaguely recall getting a solicitation in the mail offering "cheaper electricity” if I switched from Baltimore Gas Electric to Constellation Energy. Since Constellation owns BGE, I thought it was strange. Why would the parent company want to steal its own customer? Now I suspect why that was the case.
After analyzing my most recent bill, I discovered I was paying nearly 11 cents a kilowatt. According to BGE's website, their current rate is 8.6 cents. That's a difference of more than 25 percent. Since September 2014, I calculate my complacency cost me at least few hundreds dollars.
When I called Constellation to cancel my service, the operator explained rates were based on “market conditions.” But since I have been a "loyal customer," they were willing to offer me a new rate of 8.5 cents, locked in for 36 months. Constellation claims they sent me an automatic-renewal notice after my initial rate expired, explaining the news terms.
Now, I’ve learned to open mail that might look like junk, read your power bills and shop for better rates.
Still, I can’t help but think about the fun things I could have bought instead of kilowatts makes me angry at myself and the electricity industry’s new "free marketplace."
Nurse and graduate student Salome Tsurtsumia received a call offering what she thought sounded like a good deal. The electric bill at her 1,200-square-foot Newington townhouse quickly jumped from $300 a month to $700 a month, she said.
“It’s called legal robbery. That’s what it is to me,” said Tsurtsumia, who emigrated from the republic of Georgia. “This is United States of America. People come here because things like this should not be happening because we are protected under law. Sometimes I do question that: How protected are we?”
Katz of the utility watchdog agency said what happened to Tsurtsumia is typical of the complaints she hears: Customers lured by a low teaser rate see it shoot up without warning once the variable rate kicks in.
“The basic model is you sign up for one rate and all of a sudden you look at your bill and the rate has gone up, doubled, or it’s gone up 50 percent,” Katz said.
Other states have reported similar problems with tactics used by third-party electricity suppliers:
* In January, Just Energy agreed to pay $4 million in Massachusetts to settle allegations it switched customers to its service without their consent and charged more than promised rates.
* Last year, the New Jersey attorney general sued three companies, alleging that they defrauded hundreds of consumers by misrepresenting the savings they’d be getting. In January, one of the companies, HIKO Energy, agreed to pay a $2.1 million fine.
* The Pennsylvania attorney general last year filed complaints against five out-state electricity suppliers, seeking to have their licenses suspended or revoked. The attorney general reported receiving more than 7,500 complaints about spikes in the cost of electricity over a four-month period.
* In 2007, the Illinois attorney general filed a complaint against 15 energy companies accusing them of price manipulation and $4.3 billion in excess costs. The companies eventually refunded $1 billion to their customers.
Craig Goodman, executive director of the National Energy Marketing Association, said the trade association is working hard to ensure its members stick to the best business practices.
“Bad ethics in the marketplace stink. I don’t like them. Nobody likes them,” Goodman said. “The consumer doesn’t like them and it doesn’t do any good for the company either. They lose money. They lose their investors’ money and it’s all private money. It’s not utility money. It’s private money. So there’s no gain here in playing the game wrongly.”
He blamed the retail price spikes last winter on a once-in-a-generation “black swan” event: cold weather, a shortage of power in the Northeast and subsequent skyrocketing wholesale energy prices.
“The reality is we’re price takers. We are not price makers. The price is formed at the wholesale level,” Goodman said.
But Connecticut attorney Robert Izard has filed class actions against four companies, alleging the variable rates to consumers did not track the wholesale prices, as promised.
So it’s like you go to the gas station, you fill up the car, you drive around and use up all the gas and they tell you this is how much you were using per gallon.
Connecticut's Office of Consumer Counsel
“We’ve found that when the wholesale price of power goes up, the price goes up. But when the price of wholesale price of power goes down, the rate stays high,” Izard said.
“All we’re asking is for them to live up to the bargain they made. We’re not asking for anything more,” he added. “If they said, 'We’ll charge you whatever we want. We’ll gouge you,' we wouldn’t be here. But they said the price of power charged to consumers will be based on market conditions."
Lawmakers in Connecticut are now considering banning variable-rate electricity contracts, something the state’s consumer counsel favors because customers don’t learn what the rate is until they’ve already used the power.
“So it’s like you go to the gas station, you fill up the car, you drive around and use up all the gas and they tell you this is how much you were using per gallon,” Katz said.
Tsurtsumia said she once again gets her electricity from the utility, at a fixed rate. She has plenty of company: 67 percent of state resident are choosing the utility, up from 58 percent last year, according to Katz.
Tsurtsumia said she has no plans of ever returning to a third-party supplier.
“I don’t care how wonderful they make it sound and how attractive the offer is," she said. "The bottom line is they are counting on you not following up and not monitoring your bill so you fall through the cracks and you end up paying double or triple for the same services."
HUFFINGTON POST: Support Solar, But Not at the Cost of the Working Poor
Posted on Jul 07, 2016
Recently, many people throughout the country celebrated the first day of summer and the longest day of the year by urging consumers and businesses to “Put Solar on It.” I also support “Putting Solar on It,” because renewable energy sources of all types have many benefits for our country, helping to reduce carbon emissions, diversify our energy supply, and create jobs.
But as we all work to reap the benefits of the spread of renewable energy sources, we need to make sure to look carefully at the policies in place around “Putting Solar on It,” because one of these might end up hurting those who don’t have the option of using rooftop solar panels.
In fact, a policy called “net metering” is causing costs to increase for lower-income and minority groups that cannot afford such systems or do not have access to them in their current living situation. So, I am in support of putting solar on it, but not at an unfair cost to the working poor.
Let’s first examine what net metering actually is. Net metering is allowed in many states, stemming from policymakers’ desire to spur on the growth of renewable energy sources such as solar power. Net metering customers are allowed to sell back the extra electricity they generate to their electric company at the retail rate of electricity, which essentially allows them to avoid covering their fair share of the grid. This might not sound like a big deal — but the problems with this policy become apparent once you look at how electricity bills work.
One part of your electricity bill is for the power you use, and the other part covers the costs of the electric grid. If some customers avoid paying that latter portion of their electricity bill, guess what? Someone else is stuck with the difference.
Because of old net metering requirements, customers without rooftop solar panels are the ones who end up shouldering those avoided costs. This goes beyond not being fair. We all use the electric system, whether we have solar panels on our roofs or not. And actually, the grid plays a helpful role in facilitating the selling of excess electricity for rooftop solar customers. Without the grid, these customers also wouldn’t be able to power their homes when their rooftop solar systems can’t provide enough electricity to meet their needs (at night, for example).
This situation becomes even more unfair when you consider that homeowners who have solar panels are, for the most part, wealthier than those who do not. That’s not surprising, because installing solar panels can be expensive, sometimes costing more than $50,000. But even when the cost of installation is lower, families on a budget have a difficult time seeing the benefit. Something I think we need to address. Wealthy families and home owners are taking advantage of not just the positive aspects of solar (something more of us should do), but a flawed policy that sticks someone else with part of the cost. A May 2014 Wall Street Journal story notes how some customers with rooftop solar have houses that are valued at $1.75 million dollars! What’s more, those who live in apartments or rent — including many low-income families — don’t even have the option of “putting solar on it” as these solar voices advocate.
Low income households that are already spending a significant portion of their income on household energy costs shouldn’t be saddled with additional financial burdens because of their wealthier neighbors’ decision to install rooftop solar systems. Switching to clean energy sources is something we should all be working towards — but we can do without shifting energy costs from the affluent to the poor. In any discussion about “putting solar on it,” we should find a way to balance our environmental goals with economic equality. Let’s change net metering policies to make sure we don’t hurt those who are most in need.
0A 23-story-high electronic billboard in Times Square this week recognized the small team of employees at the Las Vegas-area Sun Peak Generating Station for working 25 years without a lost-time accident. Remarkably, this is the second time an NV Energy power plant team has experienced such national attention – as the northern Nevada Fort Churchill Generating Station crossed the 25-year milestone in 2012.
NV Energy President and CEO Paul Caudill noted that the company’s top operational priority is safety. “My colleagues at Sun Peak have taken that priority to heart, demonstrating attention to detail and helping each other avoid unsafe conditions or acts. Our greatest desire is that they return home safely every day,” Caudill said.
Kevin Geraghty, Senior Vice President of Energy Supply, added that the 25-year milestone is rare in the industry and especially important and impressive, considering the power plant environment of high temperatures, high pressures and high voltages. “I am very proud of this team’s longstanding safety accomplishment, as they work around the clock to provide vital electricity service to our customers,” Geraghty said.
The Sun Peak Generating Station utilizes three simple-cycle combustion turbines to produce electricity, which are especially important during the hot summer months when customer needs are at the highest. The natural gas-fueled plant also provides emergency back-up service for other members of the NV Energy fleet of generating resources. It employs five individuals on a rotating basis and can produce enough electricity to serve approximately 125,000 Nevada households.
Henry Miller, who died more than 110-years ago, was the founder, first president and driving force behind the first union of electrical workers in North America – the International Brotherhood of Electrical Workers.
Despite the key role he played in the history of the IBEW and the early labor movement, little is known about Miller’s life and career.
This short film from the IBEW Media Department sheds some light on the life and times of Brother Miller and the dawn of the IBEW.
Please Click on the link to watch the Henry Miller Story
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