Electric Company Rate Spikes

Energy deregulation in states across the country has allowed consumers to buy energy from an electricity supply company of their choice. The purpose behind deregulation is to provide consumers choice and allow competition to drive down energy rates. Now, local public utility companies like PECO and PPL are no longer the only option for energy supply, instead customers can purchase electricity from private energy supply companies. While these private electricity companies supply the power, the delivery of electricity remains the job of the local public utilities.

Many private electricity supply companies promise customers competitive, market-based rates and savings on their energy bills if they switch from their local utilities to the new supply company. However, these representations are a bait-and-switch trap. Within one or two billing cycles, many supply companies routinely increase their rates well above the market - sometimes by as much as 150% or more. A customer may even end up paying two to three times more for electricity than what he or she paid before converting. Instead of benefitting from switching to the new supply company, a typical customer loses out - to the tune of hundreds or even thousands of dollars per year.

Electric companies throughout Pennsylvania, New Jersey, and across the United States are facing consumer class action lawsuits for these excessive rate spikes. Many electricity companies use a combination of false advertising, misleading promises, and slamming to lure customers into switching to their company.

The consumer class action attorneys at of Golomb & Honik, P.C. have litigated and settled one class action and are currently investigating consumer claims that their electricity rates spiked unfairly. If your electricity bills increased excessively after being promised a fair and competitive rate, call us at (215) 278-4449 immediately to evaluate your case.

Electricity Companies and Misleading and Deceptive Promises of Savings

When a company makes a promise to their consumers, they must make good on that promise. Failure to do so is a form of deceptive marketing and is against a number of consumer protection laws. If electric companies are following the terms that they provided to their customers, there is not a problem. If they are price gouging or making promises that they are not keeping, then this is against the law and consumers have a right to seek compensation.

The New De-Regulated Energy Market

The way these new companies work is that they buy power in the wholesale market from many of the same companies that were broken apart in the 1990s. They then sell this electricity to consumers just like traditional public utility companies. Unlike traditional utilities, however, retail utilities can raise electric rates at will. They use aggressive telemarketing, door-to-door visits, and promises that lure customers to switch to their company. Sadly, these savings never materialize and consumers are left holding the bill.

Electric Companies and Dubious Marketing Tactics

  • Price Gouging: When there is a state of emergency, such as during the Polar Vortex, electric companies and other types of businesses are not allowed to engage in price gouging. If electric companies throughout Pennsylvania were engaging in this type of fraudulent and deceptive behavior, they will face serious penalties and consequences.
  • Slamming: Many electric companies are under investigation for engaging in a fraudulent and deceptive marketing tactic known as slamming. This involves switching a customer to a new utility without authorization.
  • Excessive Fees: Some electric companies have resorted to using excessive fees that are hidden in fine print. Costs to reconnect, disconnect, move service, paying your bill by phone are examples of fees that can quickly add up without a consumer’s knowledge.
  • Shady and Dubious Contract Language: Using contracts that are difficult to decipher is just one of the ways electric companies trick consumers into paying more for power. Purposefully trying to conceal fines, fees, or other billing procedures is against consumer laws.

Electric Companies and Consumer Class Action Lawsuits

Recently, the Attorney General and Acting Consumer Advocate filed a joint complaint against several of these alternative power suppliers throughout Pennsylvania for using misleading and deceptive promises of savings, slamming, lack of good faith in handling complaints, failing to provide accurate pricing information, and prices nonconforming to disclosure statements. The electric companies under investigation and named in the complaint are:

  • Pennsylvania Gas & Electric
  • Blue Pilot Energy
  • Respond Power
  • IDT Energy Inc.
  • HIKO Energy

During the winter of 2014, Pennsylvania consumers saw their electricity bills double and even triple, even when they did not use any extra energy. This went against the claims made by these companies to stay competitive with their current rates and even offer lower savings. Electric companies in Maryland, New York, and New Jersey have faced similar problems. Maryland’s public service commission fined energy companies there after they ran false ads promising savings and distributed misleading flyers to consumers.

Pennsylvania Consumer Protection Lawyers

If your electricity rates have increased suddenly after switching to a different service provider, you may have cause to file a claim. The lawyers at Golomb & Honik, P.C. are actively investigating consumer claims of rate spikes by deceptive and fraudulent electric companies throughout the country. For a free review of your case, call the Pennsylvania consumer protection lawyers at Golomb & Honik, P.C. today at (215) 278-4449 or fill out our confidential Contact Form.

The consumer protection lawyers at Golomb & Honik, P.C. have successfully represented individuals in Philadelphia, Pennsylvania, New Jersey, and throughout the United States.

(215) 278-4449

1515 Market Street , Suite 1100 Philadelphia, PA 19102