WGES increases termination fee for electricity
UPDATE: Diane also has this to say. Will nudge the company.
I still see that WGES' FAQ page on residential electricity shows the $75 or $7.00 month cancellation fee, though. They really should update that ASAP to reflect the increase as detailed in the terms and conditions of the current offers. As an alert consumer, I have an issue with a company publishing conflicting information. I'd imagine it could create problems for them as well? http://www.wges.com/page/faq.php?c_type=ELE
I've been recommending the electricity package being offered by Washington Gas Energy Services as an alternative to the standard BGE product. You can sign up for up to three years for 10.8 cents per kilowatt hour with WGES. This summer's standard BGE price will be over 12 cents. (This is transmission and generation only. BGE, which stays as your delivery service no matter whom you buy juice from, adds on a delivery charge.)
Alert reader Diane D. notes that WGES has changed the termination fee if for some reason you want to get out of the contract early. Formerly it was $75 or $7 per month remaining in the term, whichever was greater. Now it's $150 or $20 a month. I asked WGES boss Harry Warren about the reasons for the change. His response, via email:
"WGES increased its residential electricity supply termination fees in May 2009. This change is in response to the price volatility energy markets have recently experienced, moving as much as 20% in less than 6 months.
"When a customer signs an electricity supply contract with WGES for a guaranteed price and a 1, 2 or 3 year term, WGES purchases wholesale supply at that time at prevailing prices to fulfill its obligation to the customer. This puts us in a different position from other companies that charge termination fees such as cell phone or cable operators. We need to cover potential losses on reselling the electricity if a customer breaks their contract. Note that our contract terms still waive this fee if the customer moves."
I still think the three-year deal for 10.8 cents is a good bet. And note that if you change residences, they don't charge you the termination fee.
Comments
Jay,
Please comment on natural gas prices. Do you recommend switching to WGES? They have .73 per therm lock for the year (.83 for two). I know BGEs floating rate is lower, but with the way gas prices are going...I have a feeling BGE will sock it to ya once the cold weather hits. I don't think BGE's rate will maintain this level for the foreseeable future. Any thoughts?
Posted by: Patrick | June 5, 2009 10:51 AM
I've read on several sites that we're due for a harsh winter--therefore, I signed up with a year contract with WGES. I think it's worth it for peace of mind.
Posted by: Peter | June 9, 2009 11:23 AM
Jay,
WGES 3 year rate is up .1 now.
Several comments mentioned rate hikes going up to over .13/kh upon renewal.
Is the 10.8 (.9 for 3 years) just a teaser rate?
Mike
Posted by: Michael Robinson | July 23, 2009 2:04 PM