Constellation Electricity Plan Renewal Hose Job

Double Chili Cheeseburger
2012/09/07 11:02:02
I'm writing this up for my friends in New Jersey (also applies to other states) who signed up with Constellation Electric for their electricity supply. They are one of a number of companies known as competitive electricity suppliers. While you still have to pay your local, incumbent electric company for distribution, you can now choose another company for the generation and long-haul transmission of your electricity.
In the summer of 2010, a friend of mine got a blitz of mailings from Constellation Electric offering big savings on electric power. They seem to like to send these notices out in the summer, since most competitive electricity suppliers offer a year-round fixed price while the incumbents have summer rates. Constellation was offering a summer rate of 2.54 cents per kWh below the incumbent's rate, and a year-round average of 1.42 cents below the incumbent's rates. This was for a 12 month contract. He took the offer.
A year later, they send him a renewal letter. Renewals with Constellation are automatic, usually at a different rate, unless the customer takes manual action. I couldn't believe the letter when he showed it to me the other day. I took out my reading glasses. I still couldn't believe it. I cleaned my reading glasses. I still couldn't believe it. Last year, they offered him a year round rate that was .42 cents ABOVE the incumbent's year-round average. Incredulously, they printed the incumbent's LOWER average price right on the front of their renewal letter! Since the price was lower than the 2010 rate, he did nothing. What my friend didn't know at the time was that most electricity rates in the northeast fell from 2010 to 2011.
Sometime within the last year, someone must have told him he got hosed. So, he asked me to look over the second renewal letter for him. What I found was that this time they offered a rate .11 cents BELOW the incumbent's year-round average. Like in New York State, there is no price competition anymore a few years after deregulating electricity rates.
I made a good part of my living over the years fooling around with electricity. I was easily able to follow these deals. But most people don't really understand how utilities arrive at their bills. The motto here: again check to see what the other suppliers in your area are charging when it comes time to renew your electricity supply contract.
Anecdotal information on the Internet suggests Constellation is willing to negotiate on price, similar to how cable TV companies offer a sweeter deal to people calling in to cancel their cable TV service because of the high prices these services now sport. I would suggest anyone receiving a Constellation renewal letter to call them and see if they will reduce their price because you don't like the way your lights flicker with their electricity. Anyone in the biz knows, of course, that the business about the lights flickering is a crock.
Filet Mignon
Re:Constellation Electricity Plan Renewal Hose Job 2012/09/07 11:56:22
Despite utility claims, electricity deregulation was not done for the benefit of the consumer.
Double Chili Cheeseburger
Re:Constellation Electricity Plan Renewal Hose Job 2012/09/11 13:55:13
Where I live, we have GVEC,Guadalupe Electrical Co-Op. I'm sure they may get some of their electricity from the Colorado River Authority. Whole thing sounds like a big mess.