Nurse and graduate student Salome Tsurtsumia received a call offering what she thought sounded like a good deal. The electric bill at her 1,200-square-foot Newington townhouse quickly jumped from $300 a month to $700 a month, she said.
“It’s called legal robbery. That’s what it is to me,” said Tsurtsumia, who emigrated from the republic of Georgia. “This is United States of America. People come here because things like this should not be happening because we are protected under law. Sometimes I do question that: How protected are we?”
Katz of the utility watchdog agency said what happened to Tsurtsumia is typical of the complaints she hears: Customers lured by a low teaser rate see it shoot up without warning once the variable rate kicks in.
“The basic model is you sign up for one rate and all of a sudden you look at your bill and the rate has gone up, doubled, or it’s gone up 50 percent,” Katz said.
Other states have reported similar problems with tactics used by third-party electricity suppliers:
* In January, Just Energy agreed to pay $4 million in Massachusetts to settle allegations it switched customers to its service without their consent and charged more than promised rates.
* Last year, the New Jersey attorney general sued three companies, alleging that they defrauded hundreds of consumers by misrepresenting the savings they’d be getting. In January, one of the companies, HIKO Energy, agreed to pay a $2.1 million fine.
* The Pennsylvania attorney general last year filed complaints against five out-state electricity suppliers, seeking to have their licenses suspended or revoked. The attorney general reported receiving more than 7,500 complaints about spikes in the cost of electricity over a four-month period.
* In 2007, the Illinois attorney general filed a complaint against 15 energy companies accusing them of price manipulation and $4.3 billion in excess costs. The companies eventually refunded $1 billion to their customers.