Electric Shadyland: How Power Companies Rip You Off

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http://www.motherjones.com/environment/2014/01/deregulation-energy-enron-company-electricity-market



Mabel Buford hadn't been home from the hospital very long when a sales rep knocked on her door in Washington, DC, and announced that she could save her some money. Buford, a 72-year-old widow who is battling cancer, told the woman she didn't feel well. But the sales rep wouldn't leave. For the next hour, she urged, cajoled, and pressured Buford to show her one of her electric bills. Finally, exhausted and groggy from medication, Buford relented. "I just got tired of her," she says.

The sales rep put Buford on the phone with her company, Starion Energy, to sign up. Buford, a retired federal contracts officer, warned that she had a contract with another electric provider and wanted no trouble with her bills. "She promised it would be okay," Buford recalls. "She honest to God stood over the stoop and hugged me. I told her, 'Don't play with me.' But, see, she tried it anyway."

A few weeks later, Buford got two electricity bills—one from Starion and one from her old provider. Livid, she filed a complaint with the city's consumer protection agency, which helped her escape Starion's contract without the termination fee the company wanted. (Starion declined to comment.) Buford's was one of a wave of complaints rolling in across the city—and throughout the 16 states with deregulated utility markets, where a host of new retail electric companies are chasing consumers with hard-sell offers to switch away from traditional utilities like DC's PEPCO or New York's Con Edison.

A market that lacks both regulation and transparency, with a product everyone buys and few people really understand, has proven a target-rich environment for the kind of operators previously drawn to mortgage rip-offs, long-distance schemes, and multilevel-marketing (MLM) companies. One consumer advocate likens it to the "Wild West" of the mortgage business before 2008.