Bill would tighten rules on electricity deals
The Feb. 6 column was about how independent electricity companies continue to spin fairy tales about how much money people are going to save by switching from BGE's standard offer. And they nail people with high early-termination fees buried in the fine print. There are at least a couple bills pending in Annapolis that would improve education and consumers and tighten up standards for the kilowatt sellers.
One bill would require the Public Service Commission to have a a portion of its Web site as a comparison-shopping portal for people contemplating switching electricity companies. It would list BGE's and Pepco's standard price to compare and all the competing prices. This is basically what the Office of People's Counsel does now.
A week ago Del. Al. Carr sent me a draft bill he said he would be introducing. I don't see it on the General Assembly's Web site yet, but here is the key language:
(2) A RESIDENTIAL SUPPLY CONTRACT MAY NOT CONTAIN AN AUTOMATIC RENEWAL CLAUSE. 7 (3) IF A RESIDENTIAL SUPPLY CONTRACT REQUIRES THE CUSTOMER TO PAY AN EARLY TERMINATION FEE OR PENALTY ON CANCELLATION OF THE CONTRACT, THE TERMINATION FEE OR PENALTY SHALL DECREASE BY AN EQUAL AMOUNT EACH MONTH SO THAT THE CUSTOMER OWES NO TERMINATION FEE OR PENALTY AT THE END OF THE CONTRACT. (4) AN ELECTRICITY SUPPLIER MAY NOT REFUSE TO PROVIDE 13 SERVICE TO A PERSON BECAUSE THE PERSON PREVIOUSLY CANCELED A 14 RESIDENTIAL SUPPLY CONTRACT.
The biggest item, from my point of view, is the one prohibiting automatic rollovers. It's a great idea -- this is where companies make a lot of their stupid money from consumers. People sign up for what's initially a good deal. They save money. But a year later, the contract automatically renews to a not-so-good deal. Suppliers are required to notify customers by mail of the new terms, but people don't pay attention.
We could call section 4 "the Hancock clause." When I terminated my 10.8-cent, 3-year deal from Washington Gas Energy Services, I tried to sign up with WGES for their new, cheaper deal. But they wouldn't let me, saying early-termination customers had to wait for a certain number of months to re-sign.