What happened when Watchdog Nation ate lunch with AT&T CEO Randall Stephenson

My #shameATT campaign on Twitter landed Watchdog Nation in the office of AT&T CEO/Chairman/President/Big Kahuna Randall Stephenson.

Hear what happened when we gave him a red binder full of complaints

Here’s the story that originally appeared in the Dave Lieber Watchdog column in The Dallas Morning News.

  • A mistake I made about AT&T led me into AT&T Chairman-CEO-President Randall Stephenson’s office last week. That’s right. The C-Suite. Suite 400 at AT&T world headquarters in downtown Dallas.

    Guys like me can’t get past a company’s PR gatekeepers. But here I am being escorted in the elevator by a building guard. I bring a message from you to him. I carry a large red binder with more than 100 complaints about his company.

    Previously, I had written that “the big kahuna at AT&T” doesn’t list improving customer service as one of his top three goals. I launched a #shameATT Twitter campaign.

    After that, the big kahuna himself calls on my AT&T cellphone to alert me of my error. He says making customers happy has always been and will always be his numero uno. He invites me to his office for a chicken salad lunch (for which, incidentally, I pay).

    After spending 90 minutes in his office last Wednesday, I attest that the big kahuna cares about customer service. Absolutely.

    The natural follow-up I ask is: How does it feel to fail?

    And I give a little speech: “The reason I’m here, though, is specifically — besides the honor of coming to meet you — to present to you my dilemma. I really have a dilemma. And the dilemma is this. I made this for you.”

    I pull out the large red binder. The cover title I created is “The Last 100 Days.” What’s inside? 119 emails from 119 customers and employees — more than one a day — from the last 100 days. I deleted the senders’ names and other personal information to protect their privacy. But these little stories are the saddest tales of corporate failure and customer frustration one can imagine.

    “This is what my life has been like for the past 10 years,” I say.

    I explain that since I became The Watchdog in 2005, not a day goes by, hardly, when I don’t receive a complaint about his company. Stephenson is tall. Dark hair and glasses. Friendly and courteous. When I talk negatively about his company, he listens intently and doesn’t get defensive.

    “Is this something I can keep?” he asks, pointing to the binder.

  • “Yep.”

    “OK, good,” he says. “Did they ask to have the names stripped out?”

    “No,” I explain. “They wrote to me.”

    “So you don’t have their permission?”

    “Yeah. I want you to see what people say about this company.”

    “Good. I want to see it.”

    • “It’s shocking,” I warn. “Such a terrible reflection on this company. And I’ll be honest with you: When I give speeches, I will say that I think AT&T is the worst large-scale company in America. And nobody really ever argues with me.

      “This is just amazing — the level of ineptitude, of carelessness,” I continue. “And it’s shocking to me, and it’s been happening to me every day for 10 years. I’ve always forwarded these to your PR guys. But I’ve stopped.”

      “Why don’t you just start forwarding them to me?” he asks.

      “I would love to do that,” I say, “but here’s what I started sending to people.” I pull out a sheet that shows a keyboard shortcut I created to answer AT&T complaint emails. The shortcut is a link to the complaint website of AT&T’s regulator, the Federal Communications Commission.

      He says that’s an option for people. AT&T gets monthly reports to which it must respond.

      He taps on the red binder again: “I’ll be on an airplane tomorrow. And I’ll spend time going through it.”

      I say, “So that’s why I’m here, OK? I’m here on behalf of what I would call the ‘Make it stop’ campaign.”

      “What is that?” he asks.

      “Make this stop. For every 60 I get about AT&T, I get one about Verizon. For every 90 I get about AT&T, I get one about Time Warner Cable. So your ratio is so far off the charts.”

      His main point to make to me? “If you leave here with nothing else,” he says, “know that this is a priority of mine. This is my No. 1 priority. This is where we invest more capital than anyplace else.”

      He adds, “I would like to convey that we have a plan and a lot of investment” in improving customer service.


      He points to the red binder again, screaming brightly in his modern wood-and-glass office. “I’ll find this very useful. … I want to study it. I want to see if I can put together a plan and address this on a broader scale.”

      He tells me that a column I wrote last month describing a customer service horror story was studied intensely by his team. He calls these studies of what went wrong a “root cause analysis.”

      During the next hour, I glimpse what it’s like to run a company with 150 million customers and 280,000 employees. I learn how he monitors performance using scores and metrics and data, some of it independent of the company and some internal.

      I learn that customer service at AT&T is changing. Much of it will go online. Call center reps are going to get more training and better technology to help them do their jobs, he says.

      He glances at the screaming red binder again. “I don’t know what I’m going to find. I’m dying to dive into it. It will actually be valuable intel I suspect.”

      Then he says something that changes my impression of him in a big way. He is removing the gatekeepers. When I ask him again where I should send the daily complaints about AT&T, he gives me his email address.

      Do these emails go to your phone? I ask.


      If our little meeting improves customer service for one person, I’ll be happy. But my goal is bigger. His is, too. Let’s improve AT&T’s customer service for millions.

      Staff writer Marina Trahan Martinez contributed to this report.

      Check out The Watchdog on NBC5 at 11:20 a.m. Mondays, talking about matters important to you.

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Why AT&T customer service sucks

For 10 years,  Dave Lieber’s Watchdog Nation has received a steady flow of complaints about AT&T. Hundreds upon hundreds. More than any other company by far.

Each complaint I forward gets fixed. But in a greater sense, it seems nothing gets fixed. Is the culture of Dallas-based AT&T to accept the trove of complaints but never drill down to the root cause?

I don’t know why this continues to happen, but a recent letter I received may help us understand.

An AT&T call center employee has written The Watchdog. The employee gives me permission to share the letter, but I am not naming her because of her job. After the letter, you’ll read what AT&T has to say about it.


“Dear Watchdog, I’ve worked 17 years for AT&T. I have never, in all my years, imagined it would become the catastrophe it is now.

“As retention reps, we are told to not only retain existing customers after their promotions expire, but to also sell more to these people.

“In most cases, a customer’s bill will jump up $83 a month after the ‘intro’ pricing ends. We as reps are allotted at the beginning of week 5 ‘limited use’ promotions, giving folks the maximum of $40 off.

“By Monday afternoon, these are generally depleted as we take about 40 calls a day.

“This has created a culture of reps promising promos, but not adding them. Or telling the customer they are disconnecting the service, but just not doing it. Reps do not want to disconnect a customer, as this counts against the rep.

“You are right to request a user ID [of the rep]. However, it does not help, as every account is noted with the ID of the rep, and management does nothing to discourage the reps’ behavior (as the manager’s pay also is negatively affected by each disconnect their rep does).

“This goes all the way up to sales center manager, general manager and VP. None of the higher-ups care or do anything to stop it.

“They also turn a blind eye to ‘cramming’ by reps (mostly nonunion employees overseas) and erroneous misquotes.

“It’s very frustrating to be an ethical rep there anymore, as you are constantly under their scrutiny for not meeting numbers. The only way to meet these numbers is to be a liar and a sleaze. Three-quarters of my call center is on antidepressants and anti-anxiety medicine just to deal with the company. It shouldn’t be like that.

“The part in your article [a previous Watchdog report] about us not giving our User ID is really a directive that we had from upper management. A customer’s account was compromised by a fraudster with a real ID. The fraudster called in, changed the address on the account, then called in again and ordered iPhones to be shipped to the address he changed it to.

“The problem with this is none of these general managers communicate. Each state is covered by different laws and regulations. You in Texas may call and get a rep in California. In California, I do not have to let you record the call. You also have the option not to be recorded.

“Now that we are national, you have GMs in charge of call centers in California, Missouri, Texas and Georgia. They don’t train you, don’t care about you, don’t care about the customer as long as they are getting commission off your work.

“They know nothing of government regulations, and frankly, do not care.

“I’ve been through so many GMs and vice presidents. However, this is by far the most inept. We should be helping our customers, not forcing products on them they do not want. … I really don’t think anyone in the government cares.”

What AT&T says

I showed the letter to AT&T — and asked the company for its reaction.

“Unfortunately, we have no way of knowing if this is an employee of our company,” AT&T’s response begins. “But the picture painted is not the experience we create, promote or endorse.

“We have some of the best call center employees in the industry. We set expectations and limit the offers they can use. But we also provide new agents with 12 weeks of intensive training — with a focus on keeping customers with integrity and with offers based on needs determined during the conversation.

“Once out of training, our agents get regular and organized coaching and updates to their initial training with the option of additional coaching always available.”

The statement ends there.

The Watchdog deems it strange because the answer ignores the basic flaws of AT&T’s culture as described by the call center employee.


At my request, Daniel Lyons, a Boston College Law School professor with experience in telecommunications, studied the letter.

Lyons said if a company promises a customer incentives to either sign up for service or renew an existing contract and those incentives are not delivered, in many cases, that’s fraud.

Don’t expect help from government regulators, he says. “The more competitive the marketplace has gotten, the less regulators feel like they need to get involved. If customers don’t like the service they get, they can switch elsewhere.”

What’s happening behind the scenes at AT&T is not unlike what occurs at other companies. But AT&T touches the lives of more Americans than most.

At least we have an idea why the company can’t get it right.

[This story originally appeared in The Dallas Morning News Watchdog column.



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Guide to Saving on Your Electricity Bill

Note from the author: The story below served us well for many years, but in September 2017 this Guide to Electricity was completely updated. Please visit the updated version here.


More than anything, Dave Lieber’s Watchdog Nation wants to save you money. The easiest way to save in Texas, I believe, is to shop smart for electricity.

In the first years after deregulation, I was a confused shopper because power always came from a monopoly. Suddenly, dozens of new electricity companies started competing.

Not understanding the system, I overpaid – but I quickly grew tired of that. I decided to educate myself. Eventually, I figured out a system. My Watchdog Nation Guide to Electricity Savings is built on the idea that companies should be judged two ways – by lowest rate and by company reputation. When the stars align, the right company is obvious. (Note: This doesn’t apply to customers in mandatory electricity co-ops or municipal-owned utilities.)

I’ve shared this with readers of my column in the Fort Worth Star-Telegram and then again in my current column as The Watchdog of The Dallas Morning News. I’ve also shared paper copies of this strategy with at least 100,000 Texans, audiences I’ve spoken to in recent years.

Shopping for electricity is still a role of dice, but my ideas eliminate a lot of risk. Now that most electricity companies have figured out a variety of surprising and often unfair ways to collect extra fees from you, this reputational shopping, as I call it, is more important than ever.

Thousands of Texans have used this Watchdog Nation report by Dave Lieber as the basis for a switch in electric companies – saving thousands of dollars for consumers.

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Here’s The Dallas Morning News Watchdog’s gift to you – The 2015 Guide to Picking the Best Electricity Provider

1. TXU no longer rules. Get over the idea that TXU Energy, most likely your original provider, is the only company that can offer solid, uninterrupted service. And don’t believe the fallacy that TXU customers get serviced first when power goes out. Oncor Electric Delivery is responsible for maintaining the transmission system. Everybody, TXU and its many competitors, uses Oncor to handle repairs in our region.

2. Switching is good. Act under the assumption that you should switch companies every year. The market is constantly changing.

3. You can find better deals and save hundreds of dollars a year with this one decision. Electricity is measured by kWh, or kilowatts-hour. If you pay 8 cents a kWh instead of 12 cents, your monthly electric bill could drop $100 or more.

4. Know your current contract terms. Before you shop, know what you already have. (Surprisingly, most people don’t.) What’s your kWh rate? Check your electric bill. It may be higher than what’s available elsewhere. (In Texas, last week it ranged from 4.9 cents to as high as 13.5 cents.) Also call your provider and ask for the date when your contract expires. Find out whether your rate is fixed or variable. Start planning a possible switch a month before a contract expires.

5. Decide whether you want to play it safe or be a gambler. Do you want to lock in a fixed rate that you can afford for a longer period of time? Or are you willing to take a low price now and understand that a variable or indexed rate could spike depending on market conditions?

6. Conduct a thorough search. Go to this Web site: www.powertochoose.org. (If you don’t have an Internet connection, visit your public library and ask a librarian for help. Or ask a friend or relative to help you.) Enter your zip code and start searching. When you find an offer you like, make sure to go to the company’s own website. Sometimes the company’s price might be cheaper than what’s shown on powertochoose.org.

7. Pick your poison. Deeper in the website you see a search box along the left side. Under “Plan Type” a recommended pick is fixed, but you can also choose a variable or an indexed market rate. (The Watchdog likes fixed since market conditions can grow volatile.) Under “Price,” type in a range from 4 cents to 12 cents. That’s a good spread. Pick a contract length. Fill out the other boxes. Then hit “Refresh Results” on the bottom. Keep trying different combinations to see what the prices are that day. They change often.

8. Study the results. For the selection cited above, several dozen companies recently offered rates in that range. Remember that the lowest rates could come from a company with a poor reputation, but more on that later. Contract lengths varied from one to 36 months. Each service plan comes with links to “Terms of Service,” “Facts Sheet,” “Signup” and “Special Terms.” When you click on these, you learn the nitty-gritty details. Many companies have minimums about the amount of power you must use, or you pay more. Carefully look for language about other fees.

9. Check out your favorite. After you find a company with a rate and contract length you like, learn more about them. One way is to do an Internet search of the company. Place the company’s name in various searches besides these search terms: scam, rip-off and complaints. If the company has a troubled history, find out before you sign up. If only a few results come up from disgruntled customers, don’t worry. But if there are several dozen, continue with a quick search of the company’s Better Business Bureau record. And then, most important, return to powertochoose.org and below the name of the company, you’ll see “Complaint Scorecard” and “Complaint History.” Click on those links and learn more about the company.

10. Read the contract. Otherwise, you’ll get blindsided when hidden fees and charges emerge later. Look for termination fees. Contracts must be printed in letters big enough to read.

Final switch tips. When you make your final selection, don’t call your current electricity provider to cancel. Sign up with the new company only. Try to sign up at least 5 to 7 days before your plan expires so the overlap between the two billing cycles is negligible. Some people switch too late and pay higher prices during the transition. If you have a smart meter, the state rule is you must be switched within 48 hours. But 5-7 days is safer.

Remember, there’s no loss of power when you switch. It happens, and you don’t even know it.

Until the bill comes.

Click on "Complaint History" and "Complaint Scorecard" for important information.

Click on “Complaint History” and “Complaint Scorecard” for important information.

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Five Bills Designed to Make Texas Consumer-Friendly

Make shopping for electricity fairer for Texans. Force roofers to get a state license. Stop charging extra for people who pay with debit and credit cards. Verify that fingerprinting all Texans for driver’s licenses is legal. Protect auto insurance customers who ask questions about their policies.

These are the five dream bills offered up by Dallas Morning News Watchdog Dave Lieber in his recent two-part series. Read Part One and Part Two.

By far, his Retail Electricity Reform Act of 2015 is his top-priority. “I get more complaints from Texans about their electricity contracts than any other subject,” Lieber says. “I have placed the top ones into my dream bill. I’m seeking one or more lawmakers willing to take on the big powerful interests and clean up all the loopholes. So far, no legislator has taken the big step. But I’m hoping for it.”

Lieber wants to ban minimum usage fees, regulate unregulated fees and make comparison shopping easier by forcing all companies to advertise the full price including the delivery charge.

electricity screen shot

Watchdog Nation founder Dave Lieber discusses his legislative proposal on NBC5. Watch here:

Read about the four minor bills here.

Read about the major electricity bill here.

Follow The Watchdog at www.dallasnews.com/watchdog and see the progress of this year’s campaign.




Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites: DaveLieber.org

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The Watchdog: Stream Energy target of racketeering class-action lawsuit

One of Texas’ best-known electricity companies has been smacked with a major and quite unexpected setback. Stream Energy and its marketing arm Ignite face a class-action lawsuit in a Houston federal court charging that Stream and Ignite sell through a pyramid scheme in violation of federal racketeering laws.

The recipients of any potential settlement include hundreds of thousands of independent associates who worked for Ignite selling Stream electricity contracts between 2005 and 2011.

Houston lawyer Scott M. Clearman, who filed the case, says in a worst-case scenario, if Stream has to pay a major settlement, “It could close the company.”

Dave Lieber's Watchdog Nation won a 2013 writing award from the National Society of Newspaper Columnists

Business experts say the ramifications of this lawsuit are so deep that a Stream loss in the case could wreak havoc across the entire multilevel marketing industry.

Chairman and co-founder Rob Snyder tells The Watchdog the suit is “distressing.” The allegations are untrue, he says.

The company is appealing and several Stream officials tell me they expect an appeals court to dismiss the class-action certification. We’ll see.

Snyder says there is no pyramid scheme because the company sells a true product and uses established multilevel marketing systems to build its massive sales force: “We sell electricity, and we pay for word-of-mouth advertising through our associates,” he says.

Clearman’s 5-year-old lawsuit against Dallas-based Stream tells a different story. The lawyer charges that the company’s sales setup benefits those at the top. He cites federal racketeering laws because, he says, phone and mail were used to perpetrate the fraud in a conspiracy led by Stream and Ignite leaders.

Although promises of big income gains are made to bring sales people in, at least 25 percent of those who invest to get started in the sales program don’t make their money back, his lawsuit claims.

Stream chairman Snyder explains that it’s natural for sales team leaders at the top of a hierarchy to make more money than low-level associates.

“Our leaders build sales organizations, and they get a commission on the sale when our customers use electricity,” Snyder says.

The case has attracted little attention. Even a top-ranking Public Utility Commission of Texas official said the agency was not aware of the class-action certification until informed last week by The Watchdog. But the ramifications go much further than Stream alone.

The U.S. Chamber of Commerce and other sales organizations have weighed in with a legal brief. They argue that if the case is successful, businesses using multilevel marketing could face a series of challenges from participants who lose money.

“A wide range of businesses, from mortgage lenders to for-profit colleges would face the risk of being coerced into extortionate settlements without having a meaningful opportunity to present legitimate defenses,” the brief states.

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Stream’s Snyder says, “All you have to do is allege a pyramid scheme and you’ll be presumptively certified as a class-action. Defendant firms are looking down the barrel of a gun.”

Surprisingly, a staunch critic of pyramid schemes — and someone who once predicted Stream’s selling strategy would collapse under its own weight — now defends the company in this situation.

Southern Methodist University marketing professor Daniel Howard says, “The danger in this lawsuit is that if this goes through, it may ruin an entire industry, and it could bring down some pretty reputable companies as well.

“Once you have a class-action lawsuit like this saying there’s a racketeering and corrupt influence, it gives an ugly veneer to an entire industry, and that’s not necessarily true.”

The lawyer suing Stream and Ignite points to a $329 entry fee to join the sales program and a $29 monthly fee to host a sales website. He says many never make their money back. He cites dozens of sales recruitment meetings in the lawsuit where promises of great wealth were made to hopeful participants.

Until now, Stream has been riding high. The company started in 2005 and now has 350,000 Texas customers and 200,000 more electricity customers in New York, New Jersey, Maryland, Pennsylvania and Georgia.

Its marketing materials describe it as “one of the fastest-growing new enterprises in the history of American business” and “the largest network marketer of energy in the world.” The company claims about $6 billion in revenue since it began.

Most of the time, the company has stayed out of trouble. The Texas attorney general’s office has only two dozen complaints on file about the company. However, the PUC fined the company $94,000 in 2011 for numerous violations relating to contracts, marketing, connections and many other state rules.

Another top Stream executive, president Mark Schiro, tells The Watchdog: “We feel strongly that we will ultimately prevail in this case.” The judge’s decision was wrong, he adds. “And nothing has yet to be proven.”

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More Watchdog Nation News:

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Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites:

Personal: YankeeCowboy.com

Hipster site: DaveLieber.org

The Watchdog: Richardson lawyer accuses DirecTV of fraud, conspiracy, racketeering

The man sitting at the counter at Zeke’s Kitchen restaurant in Garland is acting suspicious. He doesn’t want any food but takes a glass of water. He says he’s waiting on a friend, but no one shows up. He asks that the channel be changed on the restaurant TV.

Then the man steps outside and begins taking pictures of the restaurant. When owner Brandon “Zeke” Roberson asks him what he’s doing, the man runs off.

Roberson’s wife, Julie, thinks it’s suspicious enough that she makes a note of it on the restaurant office’s calendar: “Very strange acting man. Ran off when Brandon asked why he was taking pictures outside.”

Months later, they learn what it’s all about. The man is a fraud investigator for DirecTV, sent to find out if the Robersons are TV signal thieves. Did they sign up for a residential TV account but use it at their commercial establishment?

In June, DirecTV cuts off the restaurant’s service. Then DirecTV’s collection lawyers notify the Robersons that they owe $15,000 in back bills. It’s the darkest day in the restaurant’s history. So much so that the couple have to close the place to catch their breath.

“There are days where you just need to refocus,” a sign on the front door reads. “Hope to see you all Monday when we return with clear eyes and better attitudes.”

The Robersons are certain there’s a misunderstanding. They were never told the difference between a commercial and residential account by the installer. They assumed they had the correct account. They assumed wrong.

To this point, this is a run-of-the-mill business case. Then something unusual happens that changes everything.

The Robersons hire a lawyer, Susan Elizabeth Wright of Richardson, who at first envisions an easy solution. She’ll work to negotiate the final settlement number as low as possible for her clients. They’ll pay something, but her hope is it won’t be much.

Wright begins to research the case, and what she learns is startling. She detects a pattern across the United States of DirecTV installers who, she believes, intentionally mislead business customers into signing contracts for residential accounts without realizing it. Several years later, DirecTV comes after the customers, usually for $15,000 as an initial settlement offer.

Wright sues DirecTV in Dallas County district court on behalf of Zeke’s Kitchen. But this lawsuit doesn’t only challenge DirecTV’s billing practices in the Roberson case. It accuses the satellite television signal provider of fraud, conspiracy and racketeering for its role in a pattern of lawsuits accusing small business owners of stealing TV signals.

The business owners she discovers in her research all have similar stories to that of the Robersons. They believed they were buying the correct commercial signal package for their restaurants, only to get socked later with big back bills.

It’s easy to see the confusion. The contract signed by the Robersons doesn’t clearly show whether it’s a residential or commercial account.

DirecTV spokesman Robert G. Mercer tells The Watchdog: “Using residential programming for commercial purposes is a violation of federal law and our programming agreements. [It’s] unfair to competing bars and restaurants that are paying legitimate commercial rates for their programming.

“We always want to resolve these cases as amicably as possible and that was our intention with Mr. Roberson, until the law firm representing him decided to file a baseless lawsuit, which DirecTV will vigorously defend. DirecTV has filed counter-claims for the unauthorized use and display of its programming.”

DirecTV uses third-party installers, and the one that installed the Robersons’ system on behalf of DirecTV admits he goofed.

In an attempt to get the Robersons off the hook, the installer, Gary Young, owner of Young Ideas, sends an email to DirecTV: “I had just opened my dealership. Went to this guy’s small deli shop and sold him service, not knowing the difference between the commercial and residential as I do now. The customer has no clue also. … I had no intentions of doing wrong. Simply a mistake.”

DirecTV decides to go after the restaurant’s owners anyway.

So Wright, the lawyer, takes on the big company, insisting she can prove a charge as serious as racketeering.

Ohio cafe owners say nobody ever told them the difference between residential and commercial. Same deal for the tavern owner in North Carolina.

Same thing happened at a sushi restaurant in California, a pizzeria in Pennsylvania, another pizzeria in Maine and a Tex-Mex restaurant in Murphy.

“The pattern is clear,” the lawyer says. DirecTV cites a business for $15,000 and then offers to settle for $9,000. In each of these cases, she says, the business owners insisted they sought a proper commercial account, but they apparently were deceived, she says.

In many cases, DirecTV and its collections law firm, Lonstein Law Office of Ellenville, N.Y., have collected settlement money for back payments because settling is often the easiest exit strategy, Wright says. Not her, though. Not this time, she insists.

The lawyer has one more ace in the hole. In 2010, DirecTV signed an agreement with the Texas attorney general that the company would closely monitor its third-party installers to make sure they engage in truthful business practices. Anything short of that is a violation of the agreement.

Young, the installer, and members of the Lonstein law firm did not respond to The Watchdog’s request for an interview.

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Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites:

Personal: YankeeCowboy.com

Hipster site: DaveLieber.org

The Watchdog: Texas electricity companies profit from fees that some call ‘money for nothing’

Most Texas electricity companies charge extra fees on customer bills that have little to do with electricity. These companies slide through giant loopholes in state law that often shock customers when a monthly bill arrives.

For instance, an electric company serving North Texas customers pays Oncor Electric Delivery only $2.30 to disconnect a household from service and $2.70 to reconnect.

Yet one company stated that it charges $15 to disconnect and $50 to reconnect — or $100 if a customer wants an immediate reconnection called “expedited.” Another company charges $45 to disconnect and $15 to reconnect. Still another charges $5 when it sends out a disconnection notice and $65 to reconnect.

U.S. Coins and Paper Money

Those are hefty profits for what essentially, in the age of smart meters, amounts to pushing a few buttons by Oncor. No longer must a service tech travel to a residence to turn electricity service on or off.

“These fees are money for nothing,” says Carol Biedrzycki, head of Texas ROSE (Ratepayers’ Organization to Save Energy). She’s the leading state critic of such costs, complaining that companies “have done absolutely nothing to earn” these fees.

Here’s another: The Watchdog constantly receives complaints from Texans who can’t understand why they are urged to conserve electricity, yet when they do, they get penalized.

According to a 2013 survey by Texas ROSE shared with The Watchdog, 29 of 44 retailers charge $7 to $20 a month in penalties — called “minimum usage fees” — if a customer uses less than 1,000 (or in some cases 800) kilowatt-hours per month.

Some companies that have no minimum usage requirements, according to the survey, are Entrust Energy, Apollo Power & Light, First Choice, Green Mountain, New Leaf and Summer Energy.

Biedrzycki tells me that a few years ago only a few companies charged this penalty. When I asked one company why these charges are dumped on Texans who try to conserve, Will Huffman, director of customer experience for Ambit Energy, explained: “There’s a lot of risk that we have to undertake as retail providers to procure the power. If we buy too much or don’t buy enough, there’s always a risk associated. So you’re helping offset some of that risk.”

Public Utility Commission of Texas spokesman Terry Hadley calls the slew of extra fees “just another pebble in the pile.” He explains that “to whatever extent a provider has fees, they have to spell it out in contracts and their notifications” to customers.

These fees are allowed “in general,” he says. “It just emphasizes the importance of people understanding this. In the long term, do you want a provider that piles on these types of fees? That’s something a customer has to decide.”

Biedrzycki says, “These fees are a profit center. At a minimum they should be reporting how much they made on these fees. Airlines are deregulated, but we know how much they make on baggage fees.”

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More than a decade after Texas deregulated electricity service, there are more fees than ever.

Green Mountain, for example, bills itself as “the only power company in Texas dedicated to clean energy.” But there’s a cost for that. A customer is forced to pay $5 for copies of billing records, $15 if a customer makes more than five payments in a single month, and $5.95 if a bill is paid with the help of a live agent.

That last is one of the more irritating fees. According to the Texas ROSE survey, some companies charge about $5 if payment is made with a live agent. One company doing this is called Compassion Energy. No kidding.

Here’s another unusual fee structure: Texpo Energy offered a rate of 13.2 cents per kwh for an average monthly use of 500 kwh (in 2013), 10.6 cents for average monthly use of 1,000 kwh and 10.3 cents for average use of 2,000 kwh. But get this: If a customer doesn’t use the company’s AutoPay E-Plan — automatic payments from a bank account — the company tacks on an extra 5 cents per kwh. That means 10.3 cents per kwh jumps to more than 15 cents.

Note that The Watchdog isn’t pointing to various early termination fees enforced by most companies because a signed contract makes those fees clear. Neither am I noting the many fees charged for late payments, bounced checks and other collection fees, because when someone misses a bill, a penalty is expected.

Nor am I pointing out fees that are state-approved such as an Advanced Metering Charge and an Energy Efficiency Cost Recovery Factor. All companies are allowed to charge these fees. Some list them separately on bills; others don’t.

What’s important here is there’s no standardization for fees in either their presentation to customers or actual charges. It’s quite willy-nilly. Let the buyer beware.

The only way to figure out what the real costs are is to study each company’s Terms of Service and Electricity Facts Label, available on a company’s website and also on the state-run powertochoose.org website. It’s a shopper’s nightmare because customers often must wade through dense legal language to figure it out. In a few cases, fees are not even reported.

Customers must be thorough when asking questions before signing contracts. It’s easy to forget to ask the right question. Sometimes, customer service reps give wrong answers.

The only way to fix this problem is to beef up state law and rules so a standard set of fees applies across the board. That would make it easier for Texans to shop and understand what they’re actually paying for.

State law and PUC rules in the deregulated marketplace don’t go far enough, says Biedrzycki, who has been fighting this battle, mostly alone, for several years. There’s no reason for consumers to get zapped in so many jolting ways.

Follow Dave Lieber on Twitter at @Dave Lieber.

CONSUMER TIPS: Educate yourself

Know when your electricity contract expires.

Be prepared to sign up with a new company about a week before a contract’s expiration date.

Use the powertochoose.org website to shop. Then check a company’s own website to verify the accuracy of the terms offered.

Another website to check is texaselectricityratings.com.

Study both the Electricity Facts Label and the Terms of Service before signing a contract.

Ask questions of customer service reps on the phone before signing.

Make sure you understand the extra fees before committing.

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Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites:

Personal: YankeeCowboy.com

Hipster site: DaveLieber.org

The Watchdog: With electric companies, level of trust is low

I guess it’s fair to say I’m obsessed with electricity companies in Texas, or more particularly the unfair methods they sometimes foist on unsuspecting customers.

In any relationship where you buy a product from a vendor, there has to be a level of trust. Trust that the gallon of milk for your family is healthy and safe. Trust that the book you buy doesn’t have poison on the pages.

After you hear what happened to Lisa Sawyer, it’s easy to feel let down by the means and methods some power companies use to squeeze extra pennies out of customers for a household’s kilowatt-hours charge. Pennies add up. A few cents higher for a family’s kWh rate, and the monthly bill shocks when it arrives.

It can happen to anyone. Sawyer, of Arlington, is a smart customer because she knew enough to negotiate a good rate with StarTex Power. She locked in Feb. 1 at a rate of 9.3 cents per kWh in a new long-term contract. Good deal. But then the March bill arrived, 30 percent higher than the month before. Made no sense. She doesn’t have electric heat. Then she saw the rate. 11.3 cents per kWh — two cents higher than she agreed to.

Here’s where the fun and games begin. Let Sawyer explain what happened when she reached a live agent:

“The StarTex rep told me StarTex recently upgraded its system, and my contract is not recognized. She offered me the option to overpay to avoid interruption of service or sign a new contract at a higher kWh rate. Neither of those options was acceptable to me.

“I spoke with a supervisor, Travis, who offered me the same options. He said he had no way of knowing how long it would take to resolve the system issue, and there was no way to issue a manual credit to make my bill reflect my contracted rate. He said approximately 900 customers are affected by this problem.

“I am not willing to overpay for an unknown number of months, and I’m not willing to sign a contract for a higher rate. When I proposed terminating, he said I would be charged a $250 termination penalty! That was the last straw. I filed a complaint with the PUC (Public Utility Commission of Texas).”

It’s illegal in Texas to charge a higher rate than the contracted price. Once Sawyer contacted the PUC, the game changed.

The PUC scorecard shows 36 billing complaints this year about StarTex. The PUC can fine companies for wrongdoing, but it’s difficult to prove, explains PUC spokesman Terry Hadley, who adds, “We can never be quite sure if it’s a renegade employee or a company instructing its staff to act in a particular way.”

StarTex Power spokeswoman Kelly Biemer confirms the details of Sawyer’s story. About 900 customers are affected. The problem was caused by a “computer system error.” Customer service reps who spoke to Sawyer have received “additional training” so they won’t do that anymore. (Don’t you love that?)

Letters are going out to customers informing them of the problem. And the company informed the PUC that everyone affected will get a $25 gift card to make up for the inconvenience. ($22,500 for 900 customers. A pittance.) Each customer also gets an adjustment to their bill so they don’t overpay, StarTex says.

Sawyer, though, gets a little better treatment. That’s what happens to PUC complainers, I guess. She’s supposed to get a $50 gift card and her bill was manually corrected.

StarTex is owned by Constellation, which, in turn, is owned by Chicago-based Exelon Co., one of the largest nuclear plant operators in the U.S. Both companies have exhibited some financial strain in recent weeks.

startex 1

Last month, the Maryland comptroller’s office filed a $2.6 million tax lien against Constellation for unpaid state corporate taxes, penalties and interest dating back to 2006, the Baltimore Business Journal reported. Parent company Exelon told Illinois officials it may not be able to afford to keep three of its nuclear power plants open in that state because of economic conditions.

The electricity business is tough. Operators have to guess how much juice to buy and how much to pay. It’s a gamble. But that’s no excuse to burn customers.

“We are glad there are vigilant customers,” PUC spokesman Hadley says, “but certainly we advise everyone to look at their bill every month and make sure they are charged the appropriate kWh rate.”

Hear that? The state PUC warns that you should check your rate every month. It goes back to that level of trust with electric companies. It’s not there.

In the Know

Do you know what kWh rate you’re paying? Check your electric bill.

Do you know when your contract expires? Call your company and ask.

Think twice about setting up auto-debit payments from your bank account for monthly electric bills. You can’t examine charges before you pay.

Read The Watchdog’s electricity guide.

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Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites:

Personal: YankeeCowboy.com

Hipster site: DaveLieber.org

The Watchdog: Electric bill may come as jolt

In the confusing and sometimes deceptive Texas residential electricity market, certain monthly charges called delivery fees are often more frustrating than a brownout.

Some electric companies list them in marketing materials and bills. Others don’t.

Delivery fees can add as much as 30 percent to a bill. But some electricity sales people only sell customers on the kilowatt-hour rate and leave out the delivery fee when closing the deal.

There’s only one place to learn the true kilowatt-hour charge, and The Watchdog will tell you where that is.

power consumption

Delivery fees cover the cost of moving electricity through power lines, a different cost than how much electricity is used each month. In North Texas, it’s the Oncor charge because Oncor Electric Delivery delivers the juice on behalf of dozens of retail companies that compete for business.

Delivery fees are a standard charge for everyone. Electric companies pass them through to customers.

Confusion abounds because of how the fees are presented. Companies can do it one of two ways. Companies can bundle the kwh rates and delivery fees into one lump sum, or they can split them out as line items.

How do you shop companies when some list their prices with fees and others don’t? Sticker shock hits later when monthly bills come in at a higher rate than what consumers were led to believe.

Another reason for confusion: The same fee has different names. Aside from Oncor charge, other names used are Transmission and Distribution Utilities recurring fees, TDU fees and TDU delivery charges.

Customer Justin Brower of Dallas said that when fees and taxes were added, his bill was 60 percent higher than he expected.

“It is extremely misleading to not show the customer which plans have the charges bundled vs. the ones which are unbundled,” he said.

One reason these monthly fees have moved front and center is because some of the larger retailers decided to break them out as a separate line item. It makes sense since the fees are outside the control of the electric companies that send the bills.

TXU Energy tells customers on its bills: “TDU delivery charges are regulated fees from your TDU for the delivery of electricity. Previously they were included in your energy rate, but are now itemized separately.”

The fees are set by state regulators. They’ve more than doubled since deregulation began in Texas a dozen years ago. Part of that increase covers smart meter conversions.

TXU provides an excellent breakout of the monthly fees at txu.com/tducharges. They include a 78-cent customer charge, a $2.19 smart meter charge and a $2.28 meter charge for a fixed monthly charge of $5.25. Seven other charges are based on the amount of kilowatt-hours used. All this adds a little more than 3 cents per kwh to a contract’s listed rate.

Champion Energy Services sends emails to current customers accurately advertising a renewal rate for its annual plan at 7.6 cents per kwh. Beneath in smaller print, it states, “Energy price does not include delivery fees. Average price per kwh is 11 cents.” That shows both the base cost and the transmission-added cost clearly.

“The problem,” says R.A. Dyer of Texas Coalition for Affordable Power, “is that a lot of retail electric providers are able to compete using confusion rather than price.”

A door-to-door electricity salesman will probably talk about a low kwh rate and not mention the delivery fees along with other taxes that increase a bill. That keeps an advertised kwh rate low, but it’s an incomplete statement of cost.

I promised to show the one place to learn the true price of an electricity contract. But it comes with a hedge.

By law, an electric company must list its full pricing with fees on the Electricity Facts Label for each offered plan. An EFL can be found on a company’s website and also on the state-run PowerToChoose.org.

Here’s my hedge, or really two of them. First, EFLs are confusing. An average kwh rate is shown and that includes the fees. But different companies present their numbers different ways. Some do it with text, others with numbers and text. There’s not enough standardization.

Randy Evans of Dallas told me he was certain he could shop smart by plugging company numbers from EFLs into a spreadsheet.

“Well, I was wrong,” he says. “Trying to make sure you were gleaning the correct information from these ‘Facts Labels’ was a chore indeed. Not all the numbers are necessarily there.”

That’s my second hedge. Some companies aren’t including the required information. A few ignore the requirement to put numbers in the EFL and instead give a website in the EFL offering further information.

Bottom line: Complete costs must be shown on an EFL. Check an EFL closely before agreeing to an electricity contract. Learn the “all in” rate with everything added up — kwh rate plus delivery charge.

Sounds like it should be easy to find out. But too often it’s not.

Follow Dave Lieber on Twitter at @Dave Lieber.
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Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites:

Personal: YankeeCowboy.com

Hipster site: DaveLieber.org

Watchdog Tip of the Day: Fight a bad water bill

Your water bill arrives and it’s ultra-high. But when you contact the water department, they don’t care. What do you do about a high water bill? In this Watchdog Video Tip of the Day, Dallas Morning News Watchdog columnist Dave Lieber shares ideas about how to prove to your water department that it made a mistake.

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Dave Lieber book that won two national awards for social change.\

Still here? Visit Dave Lieber’s other fun websites:

Personal: YankeeCowboy.com

Hipster site: DaveLieber.org