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McClatchy-Tribune  01/12/2017 12:01 AM ET
Electricity supplier accused of overcharging customers during polar vortex [The Morning Call (Allentown, Pa.)]

Jan. 12--The extended deep freeze known as the polar vortex that hit around this time three years ago is just a cold memory for many people, but electricity suppliers still are taking heat for allegedly gouging customers with prices higher than they had agreed to pay.

The latest case was filed recently against Plymouth Rock Energy. It is accused of making 2,500 overcharges, nearly all of them in the PPL service territory that includes most of the Lehigh Valley, during the polar vortex in early 2014 and later in the year.

Customers who were "guaranteed" a fixed rate for an introductory period were charged rates "that exceeded, and sometimes far exceeded" that rate, according to a Dec. 9 complaint filed by the Public Utility Commission's Bureau of Investigation and Enforcement. The complaint doesn't say how many customers were affected, just the number of overcharges.

Rates that were not supposed to exceed 6.99 cents per kilowatt hour went as high as 15.2 cents in February 2014 and as high as 38 cents in March and April 2014, the complaint alleges.

Plymouth Rock Energy, of Woodmere, N.Y., did not return my call. But in a written response to the complaint, it said that in the first months of 2014, a "software and administrative error" resulted in some customers being prematurely switched from their fixed rate to a variable rate.

"This error was isolated in scope and duration and has been corrected," the response says.

The incorrect pricing was unintentional and has already been remedied by refunds totaling more than $100,000 to affected customers, Plymouth Rock Energy said in its response to the PUC. The company also asked the agency to deny the complaint.

The first months of 2014 were unusually cold due to a freak weather anomaly that has become known as the polar vortex.

As temperatures plummeted, power use rose. Thousands of people buying electricity at variable rates were caught off-guard when their rates jumped without warning. Suppliers increased rates because they were paying higher wholesale prices due to the high demand.

Some rates doubled, tripled or quadrupled in just a month, resulting in bills that were hundreds of dollars more than anticipated.

Outraged customers sought help from the state Attorney General's Office, Office of Consumer Advocate and the PUC. Some argued they had signed up with their supplier because they had been told their rates, at least initially, would be less than their utility's rates or in the case of Plymouth Rock Energy, would be fixed for a period.

Plymouth also overcharged about two dozen PECO customers, according to the Bureau of Investigation and Enforcement.

Its complaint seeks about $330,000 in fines, changes to billing procedures and refunds to customers, or proof that refunds already have been paid.

In its written response to the complaint, Plymouth Rock Energy argued that penalties were not warranted because the error was unintentional and steps have been taken to ensure it does not happen again. It says there were 2,369 overcharges, not 2,476 as cited in the state's complaint.

The case will be heard by an administrative law judge, who will make a recommendation to the five-member Public Utility Commission, which will make the final ruling. The PUC operates independently of the Bureau of Investigation and Enforcement that filed the complaint.

This is the sixth case that the bureau, the attorney general or the Office of Consumer Advocate have filed against electricity suppliers stemming from price increases during the polar vortex.

Four complaints were settled. Respond Power, Pennsylvania Gas & Electric, IDT Energy and Hiko Energy agreed to pay a total of $20.7 million in refunds. They paid about $9.7 million of that amount voluntarily before the settlements.

A case against Blue Pilot Energy is pending.

What's unusual about the Plymouth Rock Energy case is that authorities allege customers also were overcharged during the spring and summer of 2014, long after the polar vortex.

With four of the previous five cases resolved, it appeared last year that the polar vortex finally would be put on ice for good. But the filing of this case shows its impacts still linger.

All investigations are different and some take longer than others, said Nils Frederiksen, PUC spokesman. He said the Bureau of Investigation and Enforcement doesn't comment on investigations until cases are filed, so it's unclear whether any others could be looming.

But Frederiksen told me that customers who believe they were overcharged during the polar vortex three years ago still have time to speak up.

"If you still have a nagging doubt about what happened in the winter of 2014 or any time between then, we'd certainly hope [you would] bring it to our attention," he said.

The clock is ticking, though, for people who received refund checks from the settlements with Respond Power, Pennsylvania Gas & Electric, and IDT Energy. Those checks expire after six months and about 57,300 checks hadn't been cashed as of Jan. 1, according to the attorney general's office.

Pennsylvania Gas & Electric checks were distributed Aug. 12 and expire on Feb. 12; IDT Energy checks were distributed Sept. 23 and expire on March 23; and Respond Power checks were distributed Nov. 23 and expire May 23. Hiko Energy checks were distributed last May and have expired. At least 1,800 uncashed checks will go to the state's Bureau of Unclaimed Property.

If you received a refund from any of those suppliers through the state settlements, I'd be interested to know how much you received and if you believe it was adequate.

The Watchdog is published Thursdays and Sundays. Contact me at watchdog@mcall.com, 610-841-2364 or The Morning Call, 101 N. Sixth St., Allentown, PA, 18101. I'm on Twitter @mcwatchdog and Facebook at Morning Call Watchdog.

 

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