Tag Archives: electricity rates

You Fell Victim to an Electricity Scam! And Three Reasons Why it Will Not Happen Ever Again.

Bill Fatigue“Knock Knock, sir, “ Two happy go lucky grinning agents beam as they walk right past your do not solicit sign in official branded polos, “We are not here to sell you anything. We just want to make sure you are receiving the right electricity rate for your business. Just get out your bill, and we will take a look and make sure your rate is the correct rate and we will be on our way.”

YIKES. A “Door Knocker” is what we call a salesman who goes from business to business (or home to home) selling power contracts. Some are legit, and some are big fat liars. My buddy Mohan has been dealing with an unfortunate situation that has made me think of how we can help here at Shop My Power. It all started just the way you read above.

After being convinced by these cats that he was being charged the wrong rate by his utility, Mohan owner of Union Ice Cream in NY, got out his bill out (no!!) for the impostors to inspect. The “agents” told him he was over paying and would he like for them to adjust his rate? Of course he agreed and signed the dotted line. What Mohan didn’t realize was that these alley cats were from a questionable supply company…. and that he had been conned. That lower rate was actually the makings of a much higher bill, and he was locked in for years. You can read more about how electricity rates can be deceiving in a previous article.

I heard a similar story not two days later, and this time I heard from a supplier. He told me about a team of brokers who go door to door and offer what  looks like a three cent rate. The fine print will reveal that yes, there is a fixed three cent adder in addition to the market index price they are also being charged. OUCH. These brokers have a fleet of Ferraris out front. Now we know why!

Contracts are binding. Unfortunately, a contract you sign under a con can be as binding as a contract you sign with full disclosure. You are legally bound. Super Bound (bound with a cape.) Here are three simple truths that will go a long way toward keeping your wallet out of harm’s way.

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  1. Remember that there is no such thing as a ridiculously low now or never rock bottom rate. Prices are where they are (like interest rates!) and electric companies are going to make the profit they need to survive. Find out what the ball park market prices look like (or contact a good broker to find out) and look to lock in at the bottom range of the average range. If a price sounds too good to be true, then IT IS
  2. Never Never Never show a door knocker your bill. If they are who they say they are, they should already have your billing information and invoices on hand. They want to get your ESID or meter number, your billing address, your current contract end date, account number and other pieces of information that will be used later to steal your business. Only give that kind of information to someone you trust! Read my article about fear in the electricity marketplace for more on how to get a real rate with real savings at Shop My Power.
  3. Never agree to anything on the phone and tell your employees not to entertain calls about your electricity bills. Tell any caller to fax  you the contract and offers and you will take a look. I would not give your email. I’ll place my bet on the fact that the contract you receive will be scandalous.

The bottom line is your utility is NOT going to visit you in your store to sell you power. In fact, I have never once seen a good reason to get your bill out for anyone who walks on to your property.

They are not utility reps, they ARE salesmen and you can bet your bottom dollar they are soliciting so kick them out before they TAKE your bottom dollar! 

If you want to have some fun, get out your phone recorder and ask them to verify their identities one more time and watch them squirm. Send what you record to me at TRAY@shopmypower.com and together we can do our part to expose bad players.

Not all Electricity and Natural Gas Suppliers are Money Grubbing Jerks.

Hang ups about swithchingNot all electricity and natural gas suppliers are money grubbing jerks.

At Shop My Power, we have certainly run into them. But just as often you find the supplier whom, as a company, is willing to be honest, take less profit exchange for client loyalty, and do what they think is the “right thing.” Let’s talk about supplier disclosure, because contract language is a great way to tell the good guys from the bad guys.

I have found our customers prefer full disclosure. Here is an example of full-disclosure you will find on the more about us page: “Shop My Power is a broker. Like all brokers and electricity sales people and supplierreps, we get paid by the suppliers we pair businesses with. In fact, the payment is rolled into your price. It is a fraction of a penny per kWh and we work very hard to earn that fraction of a penny. This fraction of a penny per kWh (or therm) payment will go to either to the supplier’s direct sales rep, the door knocker, straight back into the retailer’s pockets, to some desperate guy who you will never hear from again (usually a door knocker or multi-level marketer) or to someone like us, the power broker. The amount will be the same no matter which supplier I pair you with so that keeps me unbiased in the arena of commission. Of course I am biased against money grubbing jerks but will still present you with their offers if you want them. You should do business with good brokers because that is where your money is best spent. I can generally get you better rates, terms, and contract language than you could ever hope to get on your own. Plus, if you have any trouble, credit issues, want to add locations, move, or have trouble making ends meet? I am here for you. We are customer advocates.”

There. Now don’t you wish your electricity contracts were that clear?

Like, this clear (below is what a average supplier’s contract might say if they were being completely forth coming):

 Thank you for becoming our valued (treasured?) customer. By signing below you agree that you will pay 5.5 cents per kWh for electricity supply. This price is fixed; a fixed price cannot change no matter what between now and January 1 2016 unless something really crazy happens like a zombie apocalypse. What is included in this price is:

  • Energy
  • Capacity
  • Line losses

What this rate does not cover is

  • DELIVERY charges from your utility. Often your delivery charges cost more than your supply. These charges come from another entity entirely: Your utility. In Texas for example, you pay suppliers the supply portion, the taxes and the utility portion, then we suppliers pay the utility and government their cut. In New York, you might have a bill for both. One from say the utility Coned, and another from us. Some folks pay both supply and delivery to the utility (opposite of Texas) and the utility sends the suppliers their payment.
  • TAXES unless you are a not for profit – and even if you are there are still some taxes. Taxes come from your local, state, or federal government.
  • Meter Fee – There is a 10.00 meter fee per month. We charge this amount to small customers who use less than 100,000 kwh/year because in the months that customers use little or no power, we can keep paying our electricity bills. Also, some customers cost more for us to service than we earn from them in profit. This meter fee will cost 120.00 a year.

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You will be bound to this rate for 12 months. This is a contract and it is binding. If you break the contract, you can cost our company money and we will do what we can to recover the loss, from you. This way we can keep rates low for other customers. Early termination fee is $100 for each remaining month on the contract for this account, or not to exceed $500.00.

 

Your start date is January 1 2015 and ends January 1, 2016.

If you use more or less power than we expect you to, there will be no additional charge.

This is the number you call if you have billing problems.

This is the number of your broker.

This is the number you call if you have an outage.

This is the number you call if….you get the picture.

 

The above example “faux contract” from an average supplier is meant to explain some key matters of contention on a contract… and it sounds a little harsh right? Well it may not be. Take a look how the truth-elixir-induced full-disclosure contract would (and often does!) read from a bad player:

 Thank you for becoming our victim. We may not be in business next year because we do not hedge properly. This is how your price is 3.4 cents per kWh. This price is energy only. It does not include other cost components and will be more expensive than you can imagine next summer. It is fixed as long as you use 15,000 kwh/month. If you vary from that by more than 10% either way, we can charge you something different. If you break this contract, we will charge you the cost of all the power you did not use at 250% of market price. If you do not send us something in writing 63 days prior to contract ending that you want us not to renew you per this contract, we will automatically renew this contract for 12 months at 150% your current rate….

 

You get the picture. Now the first company does not seem so corrupt, does it?

The Connecticut PURA is proposing a really straight forward kind of contract summary that will eliminate the question marks around contracts. The template looks like this (although it is still in the making.) We think that is pretty cool. It will tell you what you need to know about the deal you just signed!

 

Sample_CT_Contract

Maybe we are looking at the future here, eh? Until the world becomes better, try to remember there is a cost to doing business. There are employees to pay, overhead to pay, risk in the marketplace to bear. There must be a profit. That is the whole point of business. If you are like us, you want to do business with companies that do good business. You might want to commit to  those who will be around for you, who will speak plainly, and tell you what the heck they mean. Contact Shop My Power today if you think we can help point you in the right direction. We know who the good guys are.