CONSUMER FORUM

What you need to know about electricity pricing

Posted March 16, 2014, at 9:13 a.m.

We received questions from a couple of consumers recently regarding electricity prices. Now that companies other than generating utilities can sell electricity, they’re competing for customers.

And while competition is often a good thing, it can create confusion. Here are a few tips from the Maine Public Advocate — the office that represents consumers in utility-related matters — to consider when mulling over competing offers.

Consumers who take no action will continue to pay what’s called the Standard Offer price. This rate is set by competitive auction and changes each year on March 1. Changes in the Standard Offer price are generally announced about three months before the effective date. The Standard Offer price is posted on the website of the Public Utilities Commission, www.maine.gov/mpuc/electricity/standard_offer_rates/index.html.

Other rates are offered by competitive electricity providers, or CEPs. The basic rate — what you pay per kilowatt hour — may be lower than the Standard Offer price. But that may not be the whole story.

A CEP price may be fixed or variable. If it is fixed, find out the term so you’ll know whether it lasts beyond the next Standard Offer price change next March 1.

If it’s variable, be aware that what appears to be a savings today may turn into higher prices in a few months. One of our consumers found that a “bundled” rate, while representing a saving initially, reflected nearly a doubling of the basic rate a few months into the contract.

There’s a five-day “buyer’s remorse” period mandated on all these contracts. Should you change your mind after that period, you may be hit with an early termination fee. Find out before signing up what the terms of the contract are and how large a fee is involved if you terminate early.

The public advocate lists the basics of each CEP’s offer on its website http://maine.gov/meopa/utilities/electric/supply.html. While that’s a good reference, you should know that a CEP’s rates can change at any time. If you’re shopping around, call the provider to make sure you’re aware of the current terms.

You have a number of consumer rights in dealing with CEPs, in addition to the five-day void provision mentioned above. A CEP must:

— Offer at least 30 days of service.

— Have a customer’s authorization for service (no “slamming”).

— Give at least 30 days’ notice before terminating service.

— Not use unfair or deceptive business practices.

— Not release a customer’s information, unless allowed by law or with a customer’s consent.

If a CEP drops a customer and the customer doesn’t make another choice, the customer goes back on the Standard Offer service. If a consumer feels the CEP has used “slamming” practices to obtain customers, the consumer may file a complaint with the PUC.

Finally, we heartily concur with the public advocate’s advice that consumers know and understand all terms and conditions before signing up for any plan. You can call the PUC’s Customer Assistance line toll-free, 800-452-4699 weekdays from 8:30 a.m. to 4:30 p.m. with questions about CEPs.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

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