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Queens Chronicle

State launches inquiry into energy markets

Schneiderman, AARP sought probe in response to consumer complaints

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Posted: Thursday, February 21, 2013 10:30 am | Updated: 10:39 am, Thu Feb 28, 2013.

Maria Concolino of Woodhaven has had her fill of energy service company representatives knocking on her door and making numerous calls to her home in an effort to get her to switch from Con Edison to the ESCO they represent.

“They come, they mislead you to begin with, they almost make it sound like they are from Con Edison,” she said.

Concolino was glad to hear that the state Public Service Commission has responded to consumer complaints and prodding from state Attorney General Eric Schneiderman, the AARP and consumer advocates, and has launched an inquiry into the retail electricity and natural gas markets.

“Unless the commission monitors the marketing activities of ESCOs, identifying those that treat consumers dishonestly and takes firm action to bar such dishonest ESCOs from continuing to do business in New York, retail choice will be more of a burden than a benefit to consumers,” Schneiderman said in comments recently submitted to the PSC. “Only by vigorously enforcing honest marketing standards will the PSC drive out dishonest ESCOs and thereby enable honest competitors to thrive and consumers to enjoy the benefits of competition.”

In a statement, AARP spokesman Bill Ferris said his organization wants to keep potential customers from falling victim to dishonest marketing ploys.

“As energy costs for the New York consumer soar, saving money by switching energy providers becomes very attractive,” Ferris said. “We just want to make sure consumers have all the facts before signing on the dotted line.”

Community Board 10 Chairwoman Betty Braton said she has heard of numerous complaints from residents — especially among the elderly — who have been badgered by ESCOs seeking their business.

“While the concept of providing choice to utility customers is good, in practice consumers are being bombarded with unwelcome phone calls — sometimes on a daily basis, often couched in language that misleads consumers into thinking the call is from Con Ed or National Grid,” Braton said. “Local residents also complain of door-to-door contacts from solicitors seeking to get them to change their utility providers. Better regulation preventing these unsolicited contacts from occurring would probably be a good idea.”

The Retail Energy Supply Association, which represents many ESCOs, said in a news release that it is proposing several retail energy market reforms in the current proceeding before the PSC, such as measures designed to enhance the shopping experience for residential and small commercial customers, including the use of a web-based price-comparison calculator.

Many consumers who switch to an ESCO wind up paying more than if they had stayed with their utility company, according to data from National Grid’s recent rate case before the PSC.

The data shows that among customers who made the switch to an ESCO between August 2010 and July 2012, 84 percent of electric bills and 92 percent of gas bills were higher than for customers who stayed with National Grid. Over the 24-month period studied, those with higher bills paid nearly $500 more for electricity and $260 for natural gas, on average.

ESCOs say they often supply services that the utilities do not — electricity generated from clean and renewable energy sources, such as hydropower, wind and solar; or fixed prices for a set term — and National Grid’s data does not account for the value of such service.

For the past decade, New York State has allowed ESCOs to sell electricity and natural gas to utility customers. Consumers who switch purchase their electricity and gas from the ESCO, but will continue to have their energy delivered by their existing utility, which also responds to service emergencies.

According to the PSC, there are approximately 85 ESCOs certified to provide electricity in New York State and more than 100 certified to provide natural gas.

In connection with its inquiry, the PSC has asked the public for input on its online survey at surveymonkey.com/s/DDT3NH9 regarding their experience with ESCOs.

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