North American Power Says It Warned Connecticut Customers Of The Dangers Of Variable Rates This Winter

North American Power – with 60,000 electric customers in Connecticut – says it went out of its way in December to warn variable rate customers that major price hikes were imminent, but some of its customers are still unhappy with the company.

“In December 2013, North American Power proactively notified (by email and postal mail) all of its Connecticut customers with a variable rate plan to inform them of a forecasted increase in the wholesale cost of electricity.  We encouraged those customers who wanted price certainty to contact us and consider changing to a fixed rate plan to manage their energy bill for the rest of this winter and beyond,” said North American Power spokeswoman Tiffany Eddy.

“Many customers took advantage of this offer and switched to a fixed rate plan. This special customer notice was not required, but was part of North American Power’s commitment to 100% customer awareness of the potential impact on energy costs.”

And the company said: In addition, North American Power always sends a notice to all fixed rate customers in Connecticut whose fixed rate terms are about to expire.  This scheduled notice informs customers to call us to enroll in another fixed rate plan, hear about other options, or if they choose, simply do nothing and roll over to a variable rate plan in keeping with the terms of their original agreement.

However, Christina Plourd of Tolland who was on a variable rate plan, said she never received an email or a letter with those warnings.

“This is my biggest complaint. They are not very good communicators,” Plourd, whose home is heated by electricity, told CtWatchdog.

It was only when her electric generation bill almost tripled that she noticed the spike and switched to CL&P. In the meanwhile she paid hundreds of dollars extra to North American Power.

Besides complaining to CtWatchdog, Plourd wrote a letter to state utility regulators urging them to reregulate the electricity market in Connecticut. Both the regulators and the state General Assembly – facing hundreds of complaints against dozens of suppliers – are considering tightening the regulation of electric suppliers, requiring more transparency as well as allowing customers to more quickly transfer their accounts back to CL&P or to UI.

Plourd tried unsuccessfully to contact the salesman who convinced her to switch from CL&P to North American. She blames part of the problem to North American and other suppliers whose marking program relies largely on hundreds of consumers to sell electricity to their friends and neighbors in return for rebates and commissions.

The Better Business Bureau also has problems with North American’s marking and says it warned the company in 2012 to clean up its act:

“BBB has received a pattern of consumer complaints alleging that North American Power and Gas (NAP)’s advertising and telemarketing representatives misrepresent the savings customers will receive when switching from their current electric service providers to NAP service.”

“Other complaints allege that NAP telemarketers fail to properly identify themselves as NAP representatives in order to deceptively switch consumers from their current electric service to NAP’s service.”

“BBB brought these matters to the attention of NAP in October, 2012, asking the company to address the underlying causes of said complaints. Although NAP responded, stating that its policies prohibit misrepresentation of its services by NAP representatives, similar complaints continue to be received by BBB.”

North American had 93 advertising complaints against it with the BBB and 59 complaints about billing and collection issues over the past three years.

At least North American responded to the BBB complaints.

Another supplier, Discount Power, failed to respond to 29 of the 35 complaints filed against it.

North American did not specifically respond to the BBB criticism, but said:

“We have a referring customer channel that encourages people to reach out to their friends and family, send them to napower.com to find out more information on our plans, and where after review they have the choice to enroll.

“We take all feedback from our customers very seriously, and respond appropriately to improve our service and products we offer our customers.”

Plourd also contacted North American Power, demanding that the company reimburse her for the difference between what it charged and what the standard CL&P rate is.

The company refused, but changed its mind and refunded her hundreds of dollars after Plourd posted complaints on CtWatchdog.com and Facebook.

North American also provided refunds to Janet Grander of Bristol and to Sarah Khan of Sandy Hook after CtWatchdog sent their complaints to the company.

The company says it had no choice but to raise prices this winter:

“This has been one of the harshest winters in over 20 years.  Because of this record cold, electricity costs in the Northeast and Midwest increased dramatically. The increased usage of electricity has caused an energy shortage and driven prices to close to record levels.  As a result, many variable rate customers of both suppliers and utilities across the country have received higher bills than expected.”

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3 Comments on "North American Power Says It Warned Connecticut Customers Of The Dangers Of Variable Rates This Winter"

  1. By no means am I an advocate for NAP, but I cannot disagree more with this article (which is in dire need of spell check). I have reviewed just about all of the BBB 189 complaints with NAP, which represents less than 1% (0.315% to be exact) of all their customers (most of which, by the way, were resolved but yet not mentioned??). The squeaky wheel and all that…

    There are several issues at work here.

    First, a majority of the complaints stem from customers switching from what they perceived as a high fixed rate of CL&P, to a lower (by 20% on avg) “variable” rate (key words “fixed” and “variable”).

    In reading the 189 complaints, many customers did not appear to understand this concept, thinking that the so-called “variable” rate was to last over a longterm.

    For example, if one was to receive a “variable rate credit card” or mortgage, one might better understand the concept. And in understanding that, read the terms more closely to understand how that rate might change and under what preemptive conditions.

    The variable rate changes on conditions sometimes outside of a company’s control (such as weather and other major events, including hurricanes and major storms affecting supply–in reliance on the delivery company CL&P/UI).

    In this case, CT has had more critical winter conditions affecting delivery to this region–New England, in particular, has been entirely affected by wholesale energy costs, similarly passed on to the consumer. NAP and others include in their terms and policies forewarning of these conditions–I know, because I was once a customer up until last year.

    For example, if one was to receive a “variable rate credit card” or mortgage, one might better understand the concept. And in understanding that, read the terms more closely to understand how that rate might change and under what preemptive conditions.

    The variable rate changes on conditions sometimes outside of a company’s control (such as weather and other major events, including hurricanes and major storms affecting supply in reliance on the delivery company CL&P/UI).

    In this case, CT has had more critical winter conditions affecting delivery to this region–New England, in particular, has been entirely affected by wholesale energy costs, similarly passed on to the consumer. NAP and others include in their terms and policies forewarning of these conditions–I know, because I was once a customer up until last year. If only those pesky customers would read their terms, and not assume everything is going to be fine and dandy by just looking at their financial “bottom line.”

    Second, many consumers assume (even BBB did as well) that customers are satisfied, until several months later when they actually review their bills, generally a month or two after the fact of the increase, and go screaming back to the utility to complain, only to ascertain that they were indeed forwarned. The only remedy the company has is to replace them as a customer with a hefty check for the difference in price–based on the combined delivery/supplier rate (ie., CL&P). Several BBB complaints–including BBB itself–used the CL&P rate as the market rate, even though they were and are not, as if they are indicative of the market!! (even CL&P raised its rates by 20% recently)

    A third issue–and to me appears to be the largest issue–is one of communication. Here, I find NAP is entirely at fault. While I give it credit for forewarning prospective customers of possible rate changes, their representatives are not too keen on responses to complaints.

    BBB received elements of phone calls from NAP outlining their responses to those complaints, but the missing pieces are the types of inane, inconsistent, and the “dumbing-down” replies to the customer on the call–hardly the type of respect that should be given to a paying customer that helps pay that rep’s salary. Yes, the rep’s replies SHOULD BE kinder, gentler–not an inordinate delay, pass off or pass-through to some other department. It should not take an act of God or even two months to resolve an issue, as what seemed to be happening in most of the complaints.

    Finally–and I know the author of this article may not like it–but this blog or issue makes it seem that he is a lap-dog for CL&P and the state energy office, constantly expounding on how great CL&P is and how everyone should be reverting to their rates. Even the state’s so-called website for statewide rates always and consistently ranks CL&P first, even though they are in the middle of the pack–#16–for average fixed rates.

    Truth is, consumers should and must review their bills and any changes on at least a monthly basis, because rates do change at least every six months. CL&P is not a God-send, and it, too, relies on the wholesale rates of New England.

    As for the prospective changes to the state laws re: “transparency” and “quicker reversion to CL&P or UI”, the state ought to ensure that the current CL&P and UI rates are correctly listed on its website, instead of favoring one over all other companies (I went to the website, found CL&P had the lowest rate, which dragged down the page along with the reader’s review of rates (constantly in one’s face)–until I left the website to return three minutes later to find CL&P’s current rate (middle of the pack), yet still sliding down following the reader. What–the state can’t assume the reader wants to look at an entire list w/o being bothered and followed by CL&P??

    Indeed, rather than allowing a customer a quick reversion “back to” (LOL, haha) CL&P or UI, gee–why not allow a consumer a quicker reversion to ANY company of their OWN choosing (ie., cheaper rates and reduced fees), versus just CL&P/UI?? In this regard, the state is playing footsie with both, and is thus affecting the energy markets to our detriment. Who is in who’s back pocket, heh??

  2. Carol Maturo | March 10, 2014 at 10:55 am |

    I have power generation with Public Power. I signed up last year with a terrific rate. I received a letter offering me a rate of 0.849 for 8 months locked. So if I am a customer, how come my February bills generation amount is .122000. I was never notified my rate would go up that much. my bill shou8ld be going down. Its almost $500.00.
    Thanks
    Carol M.

  3. I was on a variable rate plan with North American and it fluctuated between $0.09490 and $0.1099 cents for 8 months and then started the climb $0.12990, $0.13990, $19990, at which point I called to see what was happening and they said I was on a variable plan and so adjustments were possible. They offered to cut it substantially if I signed up for a fixed rate plan. I chose not to deal with a company that would pull such a maneuver. After all, if they can offer such great rates, why don’t they just do it rather than hope their customers don’t act as they sit back and reap excess profits. It took time to switch so I paid .19999 again for another month before the switch became effective. Then today, March 14 I got a flyer in the mail offering .0799 if I switch back! If they can offer such great rates, then why do they rip off customers with excessive ones. I’ll never be back.

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