D.C. energy bills from alternative suppliers subject of hearing

July 11, 2013
The Washington Post
Cheryl Thompson

Lisa Ford was making a dinner of turkey, kale and mashed potatoes when a casually dressed woman in her 20s knocked on her third-floor apartment door in Southeast Washington.

The woman said she could lower Ford's energy bill.

"For real?" Ford asked.

After hearing a few more sales points, Ford, who lives in subsidized housing and earns about $23,000 a year, signed up on the spot to get her electricity from a company called Starion Energy.

Five months later, Ford is one of scores of D.C. residents who have filed complaints alleging that alternative energy suppliers, such as Starion, duped them into thinking that they would see huge savings on their electric bill if they left Pepco. Instead, their bills have increased — some by more than 50 percent, according to their complaints. Consumers also have alleged deceptive practices, including company representatives failing to disclose billing and cancellation terms in addition to rogue sales tactics.

"The whole point was for me to lower my utility bill," Ford said. "I had to get on a payment plan so I wouldn't be sitting in the dark."

Many complainants elderly

The D.C. Office of the People's Counsel, the agency that represents utility ratepayers before the D.C. Public Service Commission, government agencies and the courts, has recorded more than 145 consumer complaints against seven alternative energy suppliers this year, including 29 against Starion. About 75 percent of all complaints were from residents of wards 4, 5, 7 and 8, neighborhoods that are overwhelmingly minority and have some of the highest poverty rates in the city. Senior citizens account for many of the complainants, the OPC said. Complaints against the suppliers have increased since last year, but officials did not know by how much.

"Clearly, the problem is wider than just one provider," said Sandra Mattavous-Frye, the people's counsel. "This is a big issue. There should be an industry-wide investigation."

The commission has scheduled a public hearing for Friday to determine whether a large-scale investigation into those companies is warranted. Commissioners will hear testimony from consumers about billing practices and marketing strategies. District law prohibits alternative energy suppliers from "engaging in...unlawful, misleading or deceptive" practices.

"We have extensive regulation about consumer protection — how they market and disclosure," said Betty Ann Kane, chairman of the D.C. commission. "If somebody's not following our rules, we're going to go after them."

Many residents still have no idea that they can get their power from companies other than Pepco. In 1999, the D.C. Council passed the Electricity Competition Act, allowing other companies to sell electricity. Pepco still delivers the power to homes and businesses, but — hoping to make power less expensive — city officials wanted companies to be able to supply that electricity more competitively and began licensing companies to do so. More than 115 companies are now licensed to supply power in the city.

In the District, alternative energy suppliers buy electricity in bulk through various power plants and distribute it through Pepco. The market determines the price to the consumer, so bills rise and fall.

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