Daily Money Tip: Even energy experts shocked by soaring utility bills

Posted: April 04, 2014

Bill Pacello, a former Public Service Electric & Gas energy auditor, thought he understood how the deregulated power generation and transmission companies were going to be charging customers. Then his elderly mother got her bill - $400 a month for two months in a row in January and February this year, more than double what she had ever paid.

Don't feel bad. Even the experts like Pacello, who worked for New Jersey's largest utility, are furious, because they believe they and their families are also being gouged.

"We all expect peaks and valleys in prices, but these are not market forces at work," Pacello said.

Many regional homeowners suffered sticker shock from their monthly energy bills in a winter wracked by persistently low temperatures and heavy snows.

In 2012, Pacello's mother, Lucy, now in her 90s, signed up for gas and electric generator North American Power (NAP) with the understanding that the rates were variable but competitive. Over the ensuing year, and especially in September 2013, her rate doubled from her previous rate from PSE&G, and by January 2014 she was billed 90 cents per therm.

A therm is roughly equal to a hundred cubic feet of natural gas, which is how gas usage is measured by utilities in Pennsylvania.

Pacello phoned his mother's new power company.

"They had assured me her rate wouldn't increase," Pacello said, "but instead they charged her twice the advertised rate."

On Feb. 4, Pacello again spoke to NAP customer service and compared NAP's website rate, which showed $0.539 per therm.

"The representative said that was an introductory rate only and there was nothing she could do," Pacello recalled. "When I asked about the rate for February, she said it was still at $0.899 per therm and would stay at that rate for the February bill.

"Instead, when my mother received her February bill, the rate was actually doubled again - at $1.59 per therm. This is completely outrageous and has no basis in the marketplace."

Thousands of customers have filed complaints with New Jersey's Board of Public Utilities ( www.state.nj.us/bpu). Click on "Customer Assistance" to learn more about unauthorized switching or billing. Call the Board of Public Utilities at 800-624-0241 or 609-341-9188. The 609 number referred us to the BPU website and to the New Jersey Division of Rate Counsel in Trenton ( www.state.nj.us/rpa), reachable by telephone at 609-984-1460.

Pennsylvania power customers can call the Office of Attorney General's Consumer Protection Bureau at 800-441-2555 or Tanya McCloskey at the state Office of the Consumer Advocate at 800-684-6560. The Consumer Advocate's website is also helpful: www.oca.state.pa.us.



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