By Jim Donovan
PHILADELPHIA (CBS) — They were looking to save money, but instead their electric bills are now going through the roof. The awful winter weather isn’t the only reason some are getting outrageous power bills. As 3 On Your Side Consumer Reporter Jim Donovan finds the reason may be your rate.
When Jamie Davidson saw his mother’s January electric bill he was shocked. He says, “I thought it was a billing mistake or a meter mistake.” The bill was for $841, over $500 more than his mother’s December bill. Davidson says, “It was so high compared to what she previously had been charged.”
The rate charged by her electric supplier, Pennsylvania Gas and Electric went from 11 cents per kilowatt hour in December to over 28 cents per kilowatt hour in January. According to Davidson, “Their response was that it was because of high demand, and the cold winter so far.”
“I was hoping a mistake had been made,” says Jenette Johnson. She and her husband Adam recently got hit with a huge electric bill too. It was $739. The rate that their supplier, IDT Energy had charged them jumped from 6 cents per kilowatt hour to 17 cents per kilowatt hour over the course of a month. Adam Johnson says, “Everything was good for close to two years and then we got this bill.”
In fact more than 750 people have filed complaints about high bills with the Pennsylvania Public Utility Commission (PUC) since the beginning of this year. So why the rate hikes? Jennifer Kocher of the PUC says, “When they went shopping for their electricity they signed up for a variable rate. Which means their rate can change any time, which is usually laid out in their terms and conditions.”
Since 2011 over 2 million Pennsylvanians have shopped around for power under the state’s electricity choice program. While PECO and PPL continue to transmit electricity in our area, consumers can opt for a cheaper supplier. Customers can choose either a variable rate that fluctuates, going up or down without notice, or choose a fixed rate that lasts for a limited period of time. According to Kocher, “Once they get outside that fixed period then they move to a variable rate.”
A variable rate that Jamie Davidson now knows can spike at any time. He says, “You’re not realizing hey 3, 4 months, or a year down the road it’s going to be extremely different than what you signed up for.”
While the PUC doesn’t regulate supplier prices, it is looking into the way these variable rate electric plans are pitched to consumers. When 3 On Your Side contacted Pennsylvania Gas and Electric on behalf of Davidson’s mother, as a good will gesture they offered to refund her $540 and charge her the rate PPL was charging during the same period of time.
If you’re in Pennsylvania, New Jersey or Delaware and are shopping around for a new energy supplier you need to understand your bill. The only way to avoid huge price spikes is to sign up for a fixed rate plan. If you’ve been hit with a big bill, see if your supplier will work with you to lower it. Often they will to keep you as a happy customer. But if all else fails, file a complaint with your state utility commission. Links to the state sites can be found below: