Dave Solomon's Power Plays: When it comes to utility mailings, read the fine printDAVE SOLOMON
March 19. 2015 4:23AM
Competition in the sale of electricity has been a fact of life for New Hampshire’s residential consumers for the past three years, yet confusion persists in the market.
Many customers are still getting stuck with high-priced variable rates after their fixed-rate contacts expire.
Complaints to the Public Utilities Commission and to state lawmakers prompted two bills in the state Legislature this year designed to enhance consumer protections and rein in questionable marketing practices by some competitive electricity suppliers.
The House bill, HB 345, would have created a consumer bill of rights, eliminating the ability of a utility to cut-off service for non-payment of an energy supply charge. That bill failed on a voice vote in the House on March 4.
A bill in the Senate, SB 170, would require the Public Utilities Commission to redesign the billing format for residential electric bills and the PUC website so that key information for consumers will jump out and hit them on the head. It’s called “conspicuous notification.”
That bill is still alive, and is likely to pass after getting an “ought to pass” recommendation on March 12 by the Energy and Natural Resources Committee. It has bipartisan support with 12 senators signed on as cosponsors, and is scheduled for a floor vote today, March 19.
In addition to mandating changes to the billing format for electricity customers and improvements to the PUC website, it puts some teeth into PUC enforcement of the competitive electricity market, authorizing regulators to assess fines, rescind contracts, order restitution and revoke the registration of any competitive electricity supplier “found to have engaged in any unfair or deceptive acts or practices in the marketing, sale or solicitation of electricity supply or related services.”
Defining unfair or deceptive practices is not going to be easy, because some competitive suppliers know how to exploit the confusion in the market with promotional materials that walk a fine line between deceptive and unclear.
While testifying in support of SB 170 back in January, the attorney who represents consumers before the PUC, Susan Chamberlin, pointed out just how confusing it can be.
“I’ve seen disclosures provided by at least one competitive supplier that say, ’OK after your fixed rate expires, this will go to the rate determined by the ISO-New England,’ ” she said. “That’s not completely inaccurate, but it’s not completely accurate either. ISO doesn’t regulate the rate, they simply monitor the market, and the market can have a variable rate that goes up to 100 percent more than what you are paying.”
A mailed solicitation from North American Power that went out last month triggered some confusion. Here’s how Rosemary Marshall of Hollis described the North American mailing.
“I received information from PSNH reflecting North American Power as the option for a change to our energy supplier. Have there been any complaints regarding their fixed rate?”
That mailing did not come from PSNH. I got the same mailing. It’s easy to see why someone would think it comes from PSNH. It says “Attention PSNH customers, First Notice,” and has PSNH all over it, but it was from North American, whose logo is inconspicuously placed in the lower right hand corner of the page. The key details of the offer are in microscopic print at the bottom of the back page.
North American has actually been one of the more stable companies in competitive supply. One company, Glacial Energy, had people going door to door representing themselves as PSNH employees.
A new entrant into the market, Ambit Energy, uses an Amway-style network marketing system that will soon have your friends and neighbors telling you what a great deal they can get you on your PSNH bill, which may be technically true, but not entirely accurate.
Regarding Rosemary’s question about complaints, I checked with Amanda Noonan, director of consumer affairs at the PUC, who provided complaint data from June 1 of last year to Feb. 20, regarding the two major competitive suppliers in the state — ENH Power with more than 40,000 customers, and North American, with about 35,000.
The PUC got 21 complaints about ENH, and 101 about North American. What accounts for the difference? Here’s what Noonan had to say:
“ENH Power offers only fixed price energy products to its customers. A few weeks before the end date of the contract, ENH communicates to its customers that the contract will be ending and offers a new fixed price, fixed term contract. The communication tells the customer what the price is and what to do if they want or don’t want to continue with ENH.
“North American Power offers fixed priced energy products to its customers as well. It also communicates to its customers a few weeks before the end date of the contract, notifying customers that the contract will be ending. The communication tells the customer what to do if they want or don’t want to continue with North American.
“It also notifies the customers that if they do nothing, they will be placed on North American Power’s variable price service. The notice does not tell the customer what that service will be priced at, most likely because the price is not yet known. For those customers that do nothing, the variable price service can be considerably higher in the winter months than the fixed-price service.”
Bottom line: Read the fine print.