WGES bans me from buying electricity for a year
Early in 2009 I signed up for a 3-year, fixed-price electricity deal from Washington Gas Energy Services at 10.8 cents per kilowatt-hour. This was substantially below the default rate being offered by BGE, so I saved a few bucks a month for a while. But starting Oct. 1, BGE's standard price for energy/transmission fell to 10.1 cents. And independent marketers are selling juice for less than that. WGES's best deal is 9.0 cents/kwh for 12 months.
So last week I dumped my old WGES contract, paying a $126 early-termination fee, which I knew would happen. I figured I would go back to the default BGE price for a couple months and then switch back to WGES at 9 cents, eventually saving more than the early-termination cost.
But after I noted my intentions on the blog, WGES director of regulatory and legislative Leah Gibbons called to point out (nicely!) that customers who cancel contracts early can't re-sign with WGES right away. "You're going to be blocked from rejoining WGES for a 12-month period," she said. While the early-termination fee is a disincentive for customers to switch back and forth between contracts, it doesn't cover WGES's cost for the lost revenue for the energy for the remaining period, she said. Blocking people from re-signing is supposed to further discourage people from switching early. The policy covers anybody who gets out of a contract early, and there indeed is language in the fine print that indicates they can do this.
I would have thought WGES would prefer having a customer at 9 cents over having no customer at all, but it's welcome to do business as it likes. The lesson in all this is that electricity shopping contains complications that many of us don't see when we first sign up.
UPDATE: I should have noted that of course I'm still free to sign up with Dominion Retail or some other independent supplier at less than BGE's 10.1 cents, which I intend to do. I got the letter from BGE yesterday confirming the termination of my WGES deal, and they said if they heard by Nov. 14 from another supplier they would switch me to them in time for the next billing cycle. May take them up on that.
UPDATE2: Notes reader Tim:
So not mentioned in your write-up is also the fact that if you want WGES to reduce you to the 10.2 they want to extend the contract through May, 2013.
It's a good point. If you have a long-term deal of 10.8 or 10.9 cents, WGES will often offer to lower your price -- if you agreed to extend your contract. Given the high early-termination fees that WGES charges these days -- even higher than what I had to pay -- this may be an attractive option.







Comments
well, I know who I'm never going to buy electrical power again, unless it's free.
Posted by: Phillip | October 28, 2010 10:14 AM
Seems to be way more trouble than it's worth.
Posted by: Michelle Brown | October 28, 2010 11:24 AM
Mr. Hancock
Try www.pointclickswitch.com as your one stop shop to compare electric supplier offers.
Posted by: MDEnergy | October 28, 2010 11:28 AM
So not mentioned in your write-up is also the fact that if you want WGES to reduce you to the 10.2 they want to extend the contract through May, 2013.
Posted by: Tim | October 28, 2010 11:31 AM
Question Can i belong to BGE smart energy program and belong to another electric supplier. Please someone respond.
Thanks
Ed: The answer is yes. Switching to WGES or anybody else does NOT affect your BGE Peak Rewards program, which pays rebates for letting them cycle your air conditioning. PEak Rewards is a BGE program, and BGE is always your utility no matter who your electricity supplier is. JH
Posted by: Ed hammerbacher | October 28, 2010 11:33 AM
Jay,
I check out BGE Home they are cheaper than BGE. I have heard alot of good things.
Posted by: Sharon | October 28, 2010 12:43 PM
My question, Jay, is whether the original contract that you signed with WGES (that you just terminated) contains a provision that supports what Ms. Gibbons told you. These contracts sound remarkably similar to the contracts that the wireless cell companies require, which, I would argue, make consumers virtual indentured servants. They certainly approach being labeled contracts of adhesion, which are voidable.
Yeah, there was language in the contract that said WGES could do this. I don't bear them any ill will. They saved me over $100 for the first year and change of the contract, and I agreed to the terms. They charged me the correct amount for early termination -- I was afraid they would charge the higher cost that they started putting in the contracts later in 2009. They promptly put me in the program when I signed up and promptly took me out when I requested that. Once the 12 months is up I would do business with them again. JH
Posted by: trebort49 | October 28, 2010 12:55 PM
We use Clean Currents - 100% wind powered (i.e. green energy) - very satisfied - currently 9.8 cents for 100% wind for a 1-yr contract (50% wind and 2-yr contracts also available). http://www.cleancurrents.com/index.php/Clean-Currents-Wind-Power-for-Home And @Ed yes Jay is right - we also are in BGE Peak Rewards.
Posted by: Bess | October 28, 2010 12:59 PM
I haven't shopped for electricity though I stay pretty much informed about it. We have made serious and successful efforts at cutting down our bills and so far we just go that route. To us, it's easier than splitting hairs over a couple of cents for kilowatts. One change? A clothesline. Also fewer washloads and that lightswitch is right in front of your face on that wall. It's a no-brainer.
Posted by: ruth | October 28, 2010 1:31 PM
Is the 10.8 cents strictly for the electricity/fuel itself? How much per KWH is the delivery? I lived in Baltimore for 10 years and cringed at my bills. I now live in Florida and have FPL. The market is not deregulated. As of Aug 2010, I pay 3.857 cents for my 1st 1000 KWH and 4.857 for each KWH beyond that. That seems to be half as much as BGE. My delivery charges are 4.699 per KWH for 1st 1000KWH and 5.699 cents for all KWH above 1000. My highest bill in summer (was record heat down here) was $145 and it's all electric. Lower in winter.
Why did Maryland think deregulation was a good thing?
Hi Tony: The delivery charge here of 2.4 cents is on top of the 10.8 cents. Right after the energy bubble BGE customers were paying around 14 cents total, energy and delivery, as I recall. JH
Posted by: Tony | October 28, 2010 2:27 PM
I got it. BGE (or competitors) fuel price higher but delivery cost lower. FPL is 8.56 cents per KW hour below 1000 for fuel + delivery and BGE would be about 11.6 cents per KWH with fuel + delivery. That's about 25% higher.
BGE is asking for a delivery rate increase, but it doesn't seem huge. JH
Posted by: Tony | October 28, 2010 2:38 PM
This is just more BS from the BS. We do not have a free enterprise system in this country and never have. Why should we all have to spend countless hours figuring out how the power companies, or the cell phone companies, or any of the other utilities, are screwing us over, and which one is screwing us less, or more, than the others? What a waste! How old are you, Mr. Hancock? How many years do you have left? On your deathbed, will you be happy that you allowed the government regulators/BGE/et al. to waste all of those hours/weeks/months of your time?
Jonathan Inskeep
Crofton, MD USA
Posted by: Jonathan Inskeep | October 28, 2010 7:55 PM
Jay,
You are a pioneer and your willingness to share your experience is much appreciated. I have twice been a customer with WGES and have no complaints, although my contracts have always been 1-year or less.
Posted by: Dan | October 28, 2010 8:01 PM
Jay, I did exactly what you did. I had a three year deal with WGES which I just canceled, but I was told that I could not do business with them again EVER! I contacted the PSC about it and they said there was nothing they could do, they don't regulate that kind of thing. Now, if the ban is only for 12 months, I am feeling better, because WGES has the best rates.
Posted by: mth3 | October 28, 2010 10:24 PM
WGES is responsible for me losing my job, my wife, and my dog.
Posted by: BillyG | October 29, 2010 6:49 AM
If you want a good rate without any contracts (rates will go lower as more suppliers start entering the market, so it's a bad time for a contract) contact me @ tommock@gmail.com. I am an independent A gent with North American Power, our current rate is .0959/kwH. Same service just lower rates.
Posted by: Tom mock | October 29, 2010 7:19 AM
I switched from BG&E electricity to Dominion 12 months ago. My house is all electric. I have been tracking my savings on a monthly basis, which has been tougher than expected due to the number of rate changes. My electric bill varies between $200 in the summer to $400 for a cold winter month. I've saved about $347 over the last 12 months. Well worth the time to shop for lower rates.
Posted by: George | October 29, 2010 7:42 AM
It seems shady that a reseller can offer power at a lower rate than the original seller. Makes me think of all the long distance telephone resellers that popped up a few years back and have mostly disappeared. Hopefully, science will someday provide us with extremely low-cost energy and the providers will only be charging the delivery fee. We can then charge our jet backpacks for almost nothing.
Posted by: johnnytucats | October 29, 2010 8:46 AM
is there any cost to switch back to bge if you dont like your new supplier?
Posted by: pwner | October 29, 2010 9:15 AM
The free market is pretty nice after all. Isn't it.
Posted by: rar3rd | October 29, 2010 9:17 AM