Beware low, variable electricity rates - abc27 WHTM

Beware low, variable electricity rates

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Pennsylvanians across the state are opening electricity bills and getting shocked, then angry, frustrated and totally dismayed.

It happened to me and I share my story so it won't happen to you.

It all began in the fall when our fixed rate with Pennsylvania Gas and Electric ended and we were bumped, without notice, to a variable rate. The price per kilowatt hour was around 11 cents. It was roughly $300 per month for an all-electric house.

I knew I could do better and began shopping at Papowerswitch.com. I plugged in my zip code and there were 75 offerings. Some had cancellation fees, some had one or two-year contracts, and there was a wide variety of prices.

My wife said, "don't do a variable, stick with a fixed rate so we know what we're paying month to month."

I heard her.

I didn't listen to her, lured as I was to American Power and Gas's six-cent offering. Six cents a kilowatt hour was a 40 to 50 percent savings over the old price. It was a variable rate.

But how much really could it vary, I wondered? Sign me up.

It took more than a month for the actual switch to American Power and Gas and the first bill at six cents per kWh was in December, a cold month with higher than usual usage. The monthly bill was $374. That's high but it would've been closer to $500 under the old rate.

So far, so good on the switcheroo.

But then came January and that sweet six cent rate was replaced by 22 cents per kWh. The bill, for one month, was $850.40. It was freezing outside and I was getting icy stares inside.

"They get you at the teaser rate, what I like to call bait and switch," said Lancaster's John Dull, an independent energy consultant with Ambit Energy. "Then a couple months down the road, they jack the price up on you and they're hoping you're not watching it."

How could anyone not notice an $850 bill, nearly three times the winter norm.

"Because it is variable that rate can change at any time," said Jennifer Kocher, press secretary for the Public Utilities Commission.

Kocher said the PUC is alarmed at the variable rates some companies are charging and they're hearing lots of complaints. In fact, by late Thursday afternoon there were 150 complaints about outrageous bills this week alone.

"You can go out there and talk about variable rates until you're blue in the face but if people don't understand it, and they still sign up for it, they're still gonna feel wronged," Kocher said.

She's got that right.

But variable rates aren't the culprit, according to Dull. His company's variable rate today is just over eight cents per kWh.

Why, I ask, is his company's variable rate at eight cents and others are charging 22 cents or even 42 cents per kWh?

"Because they can," he said. "People need to ask if our company can offer it for a little over 8.4, why can't the others offer it for a little over 8.4?"

Many experts recommend a fixed rate. It's safer and your price is locked in.

In Pennsylvania, the so-called free market is in play and it's not free. It can be quite expensive and companies can legally charge whatever they want and call it market price.

"It's kind of like going into a restaurant and ordering a cheeseburger and French fries not knowing what they're gonna charge you for it," Dull said. "You eat. You walk up to the cash register and they tell you it's $85 when you're expecting on average a cheeseburger and fries to be five or 10 bucks. The problem is you already ate it now you gotta pay it."

Another huge problem is that when you immediately try to cancel and switch out of the high rate supplier, there's a lag time of up to a month. That's right, you gotta watch as you continue to hemorrhage cash until the next meter reading.

It's especially ridiculous because meters are no longer read by guys who go door-to-door but by computers which should be able to do it immediately.

Kocher says it used to take up to 60 days to switch out of a bad plan.

"We're trying to shrink that time frame as much as possible," Kocher said. "It's an ongoing process. It is better than it was. Could it be better? Yes. We'd like it to be better."

Kocher concedes there's not much the PUC can do about bad actors. The commission wants to hear from disgruntled customers and it will make a record of complaints. Too many complaints and it could even fine some of the companies, but that won't do much to help customers pay exorbitant bills.

I call it a lesson learned. John calls it something else.

"You got ripped off," he said.

Of course there's another lesson, and it has nothing to do with electricity: listen to your wife.


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