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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