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


Lisa Ford's electric bill increased up to $149 per month after she switched her electricity to Starion Energy. Scores of customers are complaining that overly high electric bills are coming from utility companies after they switch. (Michel du Cille/The Washington Post)

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.

Virginia does not have a similar arrangement, but Maryland does. Maryland’s Public Service Commission has received 206 customer complaints against three alternative energy suppliers this year, compared with 119 for all of last year and 51 in 2011, records show.

“It’s an ongoing problem, particularly with misleading or deceptive marketing tactics,” Theresa Czarski, deputy people’s counsel for Maryland, said of the suppliers. “There’s constant stuff going on with these suppliers.”

Customer complaints in Maryland against Starion have increased from nine in 2011 to 175 this year. Starion operates in the District and eight states: Connecticut, Delaware, Illinois, Maryland, New Jersey, New York, Ohio and Pennsylvania.

Robert Bassett, compliance manager for Connecticut-based Starion, acknowledged a spike in complaints against his company but said there are measures in place to ensure that representatives don’t sell something they can’t deliver.

“We don’t tolerate any unethical business practices,” Bassett said. “And we don’t market with a promise of any guaranteed savings. We don’t use the word ‘discount.’ ” He declined to discuss Ford’s complaint or any other individual’s.

‘They lied to me’

In Ford’s case, the representative from Starion asked her for one of her Pepco bills and waited in the hallway while Ford retrieved it. The saleswoman glanced at the bill, circled the kilowatts and told Ford that switching to Starion would reduce her monthly energy bills, according to Ford, who filed a complaint with the People’s Counsel.

If her bills didn’t go down, the saleswoman told her, she could call and cancel at any time. For Ford, a 47-year-old preschool teacher and single mother, the offer was enticing.

The saleswoman pulled out her cellphone, called Starion and handed the phone to Ford, who agreed to switch by giving her name, address and phone number. When Ford’s first bill arrived, it was about $96. The second month, it was about $132, and by the third month, her bill had totaled about $149, according to copies of her bill.

“They lied to me — without a shadow of a doubt,” Ford said.

The D.C. Public Service Commission launched an investigation in May to determine whether Starion is engaging in deceptive practices that hurt consumers, according to commission records. Friday’s hearing will help determine whether the investigation expands beyond Starion.

Mary Wilson, 80, a retired school cafeteria worker who has lived in her modest, red-brick rowhouse in Ward 8 for four decades, said she signed up with Starion last year after a woman came to her home promising a discount.

“She made it sound so good,” Wilson recalled. “I thought I would try it out. Then, when I got the bill, I saw that it wasn’t a discount.”

Wilson, a widow on a fixed income, said her first bill with Starion was $58. She also had to pay Pepco $31 to distribute the electricity, she said. Her total power bill the month before she switched was about $30, she said.

Wilson said that when she called Starion to cancel, she was told to sign a letter and send it back. It took about two months for the company to get it squared away, she said.

In May, Wilson got another call from Starion, urging her to return to the alternative supplier. She refused.

“I told him I didn’t want it, that I had it once before and didn’t like it,” she said. “I like to stay where I am.”

On June 10, Wilson received a letter from Pepco notifying her that she had been switched to Starion.

“I can’t believe they did it anyway,” Wilson said. “It’s wrong.”

Ford, the preschool teacher, said she called Starion to cancel but was told she couldn’t cancel in the middle of a billing cycle. The company’s representative hung up on her, Ford recalled. She called two more times before being told to fax a letter requesting cancellation.

“I faxed it on March 15. They said they didn’t get it,” Ford said. “That’s one of the reasons I went to the People’s Counsel.”

Ward 8 resident Wilson Johnson, a disabled veteran, said he had a similar experience this year with Public Power, an alternative energy supplier based in Connecticut. A college-aged man showed up at his home on Brandy­wine Street in Southeast and promised a lower rate, even offering free restaurant coupons to switch his supplier.

“The trade-off was this astronomical bill,” Johnson said, adding that his bill escalated to $738. “We weren’t told that we would be double-billed by Pepco and Public Power.”

Johnson said he notified the company and asked to cancel his service.

“They had the nerve to offer me a new lower rate,” he said. “I just hung the phone up.”

Philip Murphy, a spokesman for Crius Energy, which owns Connecticut-based Public Power, said, “It’s not our policy to strong-arm anybody.”

Jackie Ward, who oversees constituent services for D.C. Council member Marion Barry (D-Ward 8), said many of the suppliers are purposely targeting the District’s poor, old and minority residents, particularly east of the Anacostia River.

“They prey on the elderly, and I think that’s a shame,” Ward said.

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