SHOULD YOU PLAY THE “SHELL GAME” WITH ENERGY SUPPLIERS?

BY DR. LOUIS ALPERT
Ombudsman

In an attempt to answer the above-stated critical question very often posed by Rockland’s homeowners in forums on managing the costs of gas and electric utilities, this Ombudsman first met with his fellow members of Senator Carlucci’s Senior Citizen Advisory Committee on Thursday, July 13 at the Nanuet Library, where two representatives of Orange & Rockland Utilities addressed us on the matter of utility charges for both gas and electric.

The representatives explained how our utility bills for both gas and electric are broken into delivery charges for each commodity plus supplier charges for each commodity. The delivery charges are totally under the control of O&R at the regulated rates approved by the Public Service Commission, while the supplier charges are unregulated, so that either O&R or any other approved energy supplier may be chosen by the homeowner to supply their home with gas or electric.

O&R’s rates for the supply of both gas and electric are necessarily variable and depend upon the changing market prices for each of these commodities while many other energy suppliers for both gas and electric offer both fixed and variable rates for these commodities.

The two representatives from O&R were most open about the homeowner’s right to select suppliers other than their company and admitted that in some instances the homeowner may save on their supply charges when purchasing from energy suppliers other than O&R. However, these representatives did not make any further suggestions on how the homeowner might select an alternative energy provider. They did not mention how customers could use usave’s energy comparison service, for example.

This Ombudsman, on the other hand, has attempted to assess the various options available and broke them down as follows:

FIXED RATE OPTIONS OFFERED BY GAS AND ELECTRIC SUPPLIERS

Homeowners who are members of various churches, synagogues or other organizations may often benefit by being allowed to tap into the beneficial rates secured by these groups based upon their volume discounts.

VARIABLE RATES OFFERED BY GAS AND ELECTRIC SUPPLIERS

As mentioned above, O&R only offers variable rates, so that the homeowner is always subject to market fluctuation for both their gas and electric rates when purchasing energy from them.

Many other energy suppliers of both gas and electric, on the other hand, may offer introductory or “teaser” rates for each commodity, but the homeowner must be especially cautious of this marketing tactic:

A good case in point (supplier’s name withheld) concerned an introductory (‘teaser”) rate for electricity of 8.89 cents per KWH that jumped in only one month to 11.5 cents per KWH as well as a “teaser” rate for gas of 59 cents per CCF that jumped the next month to 65 cents per CCF.

While there are generally no penalty charges for switching out from a variable energy supplier to another supplier, it still may take up to two full billing periods to make this switch, so that the homeowner might have to pay the existing (high) rate for an extra two months.

In this Ombudsman’s further investigation of gas and electric suppliers that may be of interest to our readers, I discovered a company named AGWAY 888-982-4929, offering both FIXED and VARIABLE rates for each of gas and electric supplies. Their introductory (“teaser” rates) while tempting, are not the ONLY reasons to consider this company:

AGWAY offers a benefit to all of its customers known as “ENERGY GUARD,” which provides a guarantee to the homeowner that in case their boiler or their central air-conditioning unit ceases to operate, but is repairable, AGWAY will repair either unit at their expense, but limits the repair expenses of the central AC unit to no more than $1,000.

The decision to choose an energy provider with a fixed or variable rate is strictly up to the homeowner and his tolerance for risk.

I strongly suggest that the homeowner who would like the added protection of a guarantee for their boiler and central air conditioning unit contact AGWAY to confirm the existence of the “ENERGY GUARD” program discussed above.

Please direct all comments and questions to: [email protected].

  ombudsman, OR, Orange & Rockland, rockland homeowners