My home phone rang last night. It rarely does and the number was unfamiliar, from Washington State. I picked it up to hear a recorded message: “Due to recent regulatory changes in your area, there is an opportunity for you to save on your Com Ed electricity bill.” This recording, of course, peaked my curiosity. First, the recent regulatory changes that allow residential customers to shop for electricity in my area occurred in 1998. Second, Com Ed is in Illinois. I live in New York City.
Of course, I am also curious because this is my business. And while The Megawatt Hour provides service to non-residential customers, the need for clarity and transparency exists in residential markets as well. My home account is currently on the Con Edison default rate. We are looking for a supplier now, so the call was timely.
The recorded message gave me two options: press 3 to save money on your electricity right away, or go get your electricity bill and stay on the line to speak to an agent. I stayed on the line. Stacy, a man, got on the phone with me. He asked me for my utility account number so that he could plug it in to the computer and tell me the best program for me. I asked him where he was calling from, he said “The Electric Savings Center”* which is hired by electric suppliers to put me on an energy savings rate.
When I asked what he meant by “best program”, he said he meant the one that would save me the most money. I asked him to give me a sense of the options– what type of program did he mean? He said he couldn’t tell me without my utility account number. I asked, again, what type of options he was seeing out there and with which companies. He said he couldn’t tell me.
Myth #1 A company requires your utility account number to talk about available market alternatives: Any supplier or marketer who is actively marketing to residential customers should know and be able to articulate the general service options available in that area. If The Energy Savings Center was really working for a range of suppliers, and wanted to offer real value, they would have spent 2 minutes explaining the fixed or variable rates available to me, even in general terms.
He said I could go and do the research myself, but that it was very confusing. So I asked if he could help me understand the whole deal. Please explain the market and the alternatives, I said. He said– only if you give me your account number. He said “They don’t tell us the alternatives.” See Myth #1 above. I confirmed that he would not switch me over automatically if I gave him my account number. He said no– that it would be verified by a third party first (that is the rule in NY State– no switching over the phone without third party verification). Giving him my account number should not result in a switch to another supplier.
I fished my utility account number out of the pile of unfiled bills. I provided him with my account number, which he said he was plugging in to his computer. The result, according to Stacy, was that I should join the Citizens Choice Energy Discount Program. He explained that I would continue to receive one bill from Con Ed, and that I would be paying up to 10% less each month. I asked if that was a guarantee. He replied by saying that I was eligible for a coupon for up to $500 for use at any store, including on prescription drugs. I went back to the question of guarantees, and he said he never said anything about a guarantee, but that other customers like me were seeing savings of up to 10%.
Myth #2 It is reasonable to expect savings on a regular basis compared to Con Edison’s variable rate (in fact, it isn’t): There are no guarantees from Citizens Choice Energy Discount Program, or any other supplier, for that matter, because it is very difficult (impossible) to make savings guarantees in a commodity market in which the price is based on a variable, day ahead rate. Con Edison’s standard residential rate is based on a day ahead hourly price for electricity. Anyone who is going to deliver savings will have to buy power in such a way that they “beat” Con Edison’s day ahead hourly rate. That’s a tall order. The NY Public Service Commission launched a residential/small business program with local utilities in the State that guarantees 7% off the supply portion of the bill for two billing periods as long as the customer signs up through the utility with an approved provider. Since I was not enrolling through Con Edison, I am fairly certain that I would not have qualified for that discount if I’d told Stacy to go ahead and enroll. In fairness to Stacy, he did not promise me savings, and he did not mention the Con Edison program.
The end of the story.
Stacy finally got frustrated, and he said “You’re asking too many questions”. So we ended the conversation there. It may be the case that Citizens Choice offers great products and great service. I don’t know. I was not inclined to explore further because I never felt comfortable enough to try. There is no question that at this point I will have to do my own leg work in order to find the right supplier.
What we would love to see… and how to create a happier end to this story. Imagine this: Imagine could find someone on the phone or online who would explain the alternatives simply and clearly. Imagine they gave you a full picture, and sought to understand what your goals were (savings? green power purchase? price certainty?). Imagine they then provided you with two or three options based on those objectives. Imagine you knew all the details, and felt completely comfortable making a choice based on those options. Imagine you were comfortable that you were getting complete information, and that it was straight forward and unbiased. Would you switch suppliers? I would.
We’d love to hear your stories about switching suppliers, and the information you gathered along the way.
*Side note: I did a little digging on “The Electric Savings Center”. While there is no company by that name that comes up from a Google search, they have been reported on a blog/service that reports “unknown 800 numbers”. They are calling people all over the US. A series of notes about “The Electric Savings Center” is available here.