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North American Power Says It Notified Variable Rate Customers of Potential for Expensive Winter

by Brian McCready | Feb 21, 2014 8:03pm
(9) Comments | Commenting has expired

Screengrab from the state’s supplier comparison page

At a public hearing Wednesday night in Milford, dozens of speakers expressed outrage over soaring utility rates.

Several singled out North American Power, which is one of the suppliers available through the state’s electricity exchange, as the biggest offender.

Other companies also were mentioned. Speakers said their variable rates almost tripled this winter and their utility bills more than doubled. They pleaded with state officials to help them.

Responding to the complaints, North American Power spokeswoman Tiffany Eddy said Friday that the company voluntarily informed its customers in December that rates could substantially increase this winter, and urged them to take a fixed rate. Eddy also said some of the people who complained about North American Power at the Milford hearing were not North American Power customers.

Public Utilities Regulatory Authority officials announced last week they have “opened a docket” to look into complaints from consumers, and scheduled five public hearings around Connecticut to learn about consumers’ experiences with electricity suppliers in the exchange.

Elin Swanson Katz of the Office of Consumer Counsel has said her office has received many complaints about skyrocketing electric rates from people who “felt they were taken advantage of.” Katz pledged that PURA is performing a thorough investigation.

Eddy said company officials anticipated prices would increase substantially this winter because of a lack of available natural gas resources in New England. She said the company emailed and mailed letters to all of its customers on variable rate plans, offering to switch them to a fixed rate.

Eddy provided CT News Junkie with a copy of the correspondence. The letter begins in all caps stating “IMPORTANT NOTICE ABOUT YOUR NORTH AMERICAN POWER ELECTRIC RATE.”

“Because your continued satisfaction is extremely important to us, we want to make you aware of a situation that is going to significantly impact the forecasted cost of electricity within the New England wholesale market this winter,” the letter states.

The letter goes on to state that because of record demand for natural gas this winter, prices are likely to increase.

“This increase will affect the winter electric supply rates of both the utilities and retail suppliers across the region,” North American Power’s letter states. “To minimize the impact to you, North American Power is offering its valued customers the opportunity to lock in on a fixed rate plan that will allow you to stabilize your energy costs and get through the winter with peace of mind knowing your rate is guaranteed not to change for the duration of the term.”

Eddy said the company’s mission is to “always make sure our customers are satisfied.”

“We wanted to protect our customers,” said Eddy, while adding North American Power has 280,000 energy customers, including 60,000 in Connecticut.

She said North American Power offers a Guaranteed Savings Plan, through United Illuminating Co. and Connecticut Light & Power, which is a variable rate plan “that is guaranteed to beat the utility’s rate-to-compare through June 30.

“Customers can leave this plan at any time, with no cancellation fee — so it provides both the stability of a fixed rate plan and the flexibility of a variable plan. In addition to this plan, we offered a fixed rate of 9.49 cents for 10 months. We notify customers in advance when each plan expires,” Eddy said.

During Wednesday’s forum, some speakers alleged that they even had fixed rates that would spike.

But Eddy said customers on a fixed rate plan pay the same price every month for the term of the plan.

“We do not change the rate over the term . . . we notify them in advance that the term is about to end, and that they can either contact us to switch to a new plan or they can do nothing and move to our month-to-month variable plan, per the terms of their original fixed price agreement. It’s important to note that this is not a requirement, and we do so voluntarily,” Eddy said.

A PURA official could not be reached for comment Friday. Commissioner Michael Caron has said utility complaints have more than doubled from a year ago.

State Sen. President Pro Tempore Donald E. Williams Jr., D-Brooklyn, and State House Majority Leader Brendan Sharkey, D-Hamden, have proposed several ways of making the process more transparent.

Williams and Sharkey are seeking to require additional, prominently printed information on electric bills, including notification of rate increases, date of auto-renewal, and any cancellation fees.

The Democratic leaders are seeking to print standard offer rates on every bill next to the applicable private supplier rate, and require online bills to display the same information as required on printed bills.

And lastly, Democrats’ want PURA to establish an online marketplace where customers can easily compare all private electric supplier offers and purchase directly through the marketplace.

PURA has scheduled hearings for Monday 6:30 p.m. in Room 135, Brookfield Town Hall, 100 Pocono Road, Brookfield

Tuesday, 6:30 p.m. in the Norwich City Hall, 100 Broadway, Norwich

Thursday, 6:30 p.m. in the City Hall Building, Veterans Memorial Hall – 2nd Floor, 235 Grand St., Waterbury

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(9) Comments

posted by: Jim in Mfg | February 21, 2014  9:30pm

PURA and Politicians - Decouple the alternate generators bill from the NU/UI Transmission & Distribution bill.  Consumers will then be able to take care of themselves when these brokers and re-sellers try to gouge them and collect from them.

posted by: Chien DeBerger | February 22, 2014  9:27am

P.T. Barnum stated: ““There’s a Sucker Born Every Minute” Why should we be looking to the government to bail them out?”
Didn’t anyone learn with the variable rate mortgages a few years back?

posted by: Noteworthy | February 22, 2014  8:36pm

It is a total crock that you have to be a fixed rate subscriber of these deregulated companies like Public Power and Utility or North American Power. These organizations are little more than marketing firms, brand managers. The idea that they save consumers money is patently false. On Thursday night’s hearing with PURA, many more citizens brought tales of abuse to their attention - three different people, all Discount Power customers, testified under oath, not only about the rapid escalation in their rates, but also what their rates were - each had a different rate! For the same time period.

1. Decouple the generation from the delivery;

2. End long term contracts. Every customer should get the best rate, always.

3. Notices should be provided in writing, in an email and with a phone call. Sending a form letter, that looks like a form letter, when your utility bill could double or triple accomplishes nothing.

What these [suppliers] are doing is pretending they’re a cell phone service and are selling us discount phones in exchange for a long term contract. That’s a crock.

posted by: DuffTerrall | February 22, 2014  9:46pm

“Democrats want PURA to establish an online marketplace…”
Isn’t that what energizect.com is? Hence the lovely page that gives you the suppliers, rates, terms, and approximate savings?

posted by: Jim in Mfg | February 23, 2014  10:42am

Variable rates are not inherently bad but the some alternate generators use short term fixed teaser rates to snag customers and then “slam” them with “variable”  (read unreasonable) rates.  There is no pre-advice of what these variable rates will be as the electric bill arrives after the month end reading.  On Jan 7, 2012 I received a notice from my supplier, Dominion, that my fixed term rate had expired and “you have the option not to renew at these terms and may cancel service with us at anytime without penalty”.  They did not say what the variable rate was.  My CL&P bill for the reading of Dec 31, 2012 was received around Jan 7, 2013 and showed my Dominion generation of 384 Kwh at .0799 and 2150 Kwh at .1199.  The Dec 2012 CL&P standard rate was 8.315 and that dropped to .7615 in January.  Thus in my December bill I was charged $79 above the Dec CL&P rate for the 2150 KwH.  Had I not been careful, I could have incurred hundreds of dollars extra for January’s bill. 
If you have a dispute with your electric supplier you are in the unenviable position of fighting the Generator AND CL&P while the latter does the collection, adds 1% per months and won’t discuss the non-CL&P part of the bill. 
Give consumers a fair shake by taking the generation billing out of the regulated giants hand.

posted by: StanMuzyk | February 23, 2014  4:17pm

The Bottom Line: Pick the provider that provides the LOWEST FIXED RATE.

posted by: jenand | February 24, 2014  7:25pm

I was baited and switched and had to peel myself off the floor when I got my bill for this month.  I was not notified of any changes/expected rate increases. Between the electric, the phone, and the oil,disabled and older folks are going to have to sell their homes and move into elder housing, and ask for more assistance through other programs.  When things don’t make sensse, it means that corruption is lurking.

posted by: timelord | February 25, 2014  12:31pm

Good grief! The previous posters are a bunch of whiners who refuse to take responsibility for their own decisions.

I’ve been taking advantage of alternate suppliers since they first became available and I’ve switched many times.

READ what you’re signing up for; it’s all there in black and white.  I saw the short-term fixed teaser rates and said “no thanks” because it seemed too risky.

People should stop trying to blame others for their own choices. All the information you need to make a decision is right there in front of you. If your variable rate goes up then switch providers. Otherwise, please just shut up!

posted by: StanMuzyk | February 25, 2014  12:40pm

@timelord:  You answer was correct—even though it lacked politeness.