Fix the System
I have found a lot of victims of Ambit, which has been a very serious problem for years [“Asleep at the Switch: The Scam Albany Won’t Fix,” Voice, February 3]. I’ve warned people away from companies that use multi-level marketing because they almost always underdeliver on their promises — and overcharge. If you review the New York Public Service Commission (PSC) complaint scores, you’ll find Ambit has racked up far more complaints than all of the other companies pretty much combined. Their rate guarantee is phony and you have to watch them like a hawk for sudden increases. Nobody scrutinizes their utility bills, and competing electric providers are NOTORIOUS for making their rates as opaque as possible, making it next to impossible to compare one company’s rates against another to help you realize you are being gouged.
Energetix pulled a fast one on us here in Rochester about a year ago when we were suddenly put on a fixed-price contract without notification — at 13 cents a kilowatt-hour. Our bill increased at least $100 a month, but like everyone else, we assumed it was just the cost of energy. Silly me. It was just another ESCO ripoff in a marketplace rife with abuse and overdue for oversight.
I have since found the Energy Co-Op of America, which is a real co-op in Amherst, serving New York and Pennsylvania, and have been very happy paying just 4 cents a kilowatt-hour, a fraction of what I was paying Energetix. They have saved us at least $1,000 in 2015. At the same time, I’ve warned people not to do business with firms going door to door or sending you checks in the mail to enroll. They almost always lowball you with introductory rates and gouge you later after you’ve long forgotten about them. I also recommend that people not choose fixed rates, which benefit the utility in virtually every case except during a rare crisis or emergency. Paying as you go saves you more. I still buy natural gas from Rochester Gas & Electric, which often sells for less than competing deregulated providers do.
The PSC needs to seriously overhaul this so-called competitive marketplace, because it is designed to confuse, confound, and rip off unknowing customers. At the very least:
1) The PSC should mandate that all providers submit daily average residential pricing for different regions in New York, to be published on a PSC-administered website showing a clear rate comparison between different ESCOs. Currently, you are directed to ESCO websites, which are often out of date or only publish rates for commercial customers and offer residential customers vague promises of percentage-off savings, which cannot be verified. Putting the rates up for comparison encourages more competition, not less.
2) Choosing an ESCO online should include state-mandated consumer protection language that clearly states if a customer is enrolling in a promotional rate plan that will reset on a certain date and specify the average difference in price customers can expect to see once the introductory plan expires.
3) Term contracts that include cancellation penalties should be prorated to reduce the penalty for each month a customer completes a percentage of that contract.
4) Customers should receive a confirmation letter when changing suppliers that includes the prevailing rate for energy on that date from both that competing supplier and the customer’s current provider, to provide customers with a fair comparison, with the right to cancel penalty-free within a fourteen-day window.
5) Switching providers should be made less cumbersome. Currently utilities wait until the next scheduled meter reading before they process a change of utility providers. That reading should be replaced with a near-immediate estimate instead, allowing transfers to occur in a matter of days, not up to two months.
— Phillip Dampier, via Facebook
Ambit appears to operate as a type of pyramid scheme — but one that produces no product, provides a service you already have, and does so with government encouragement. Years ago I contracted with an ESCO because it gave me some bonus airline miles and implied it would lower my electric bills. They quickly shot up 30 to 50 percent, but I was able to return to Con Edison in four months. The bonus miles were only worth a fraction of the extra charge I paid.
The irony of all that was that the ESCO was Entergy, which runs our nuclear plant and is one of the largest energy providers in the nation. Why they would have to overcharge is beyond explanation.
— Rita Wilmers, via Facebook
Slow on the Uptake
I’m so glad you did this article. A friend working on commission signed me up for Ambit. Like most people, I have automatic payment and didn’t pay attention for a long time. When I did, I was shocked. The company made it as difficult as possible to get out of the contract. My rates with Con Ed are about 40 percent as much.
— Steve Weinstein, via Facebook
This article from the Village Voice Archive was posted on February 9, 2016