On Sunday, four young men canvassed my neighborhood, going door to door offering great savings on your gas bill.
The polite man at my door told me he was from energy service provider XYZ (I changed the name of the company), and that with deregulation they can lower my gas bill substantially. As the young man continued with his script to entice me with cheaper rates and overall savings, his spiel offered only limited information in order to make the sale.
Sure, they can offer you a flat lower rate for the commodity only — gas.
But here’s the rest of the story. Public Utility Commission has no authority over private energy service providers. All energy service providers get their commodities (gas) from the same source. XYZ can purchase it cheaper; however, they still have to use someone else’s transmission lines (pipes in the ground). Public Utility Company ABC owns the transmission lines and will apply transmission fees to the customer who purchases gas from XYZ. Furthermore, ABC offered base line allowances, which may be lost from XYZ, who only offers a flat rate.
When you purchase gas from Public Utility Company ABC, they charged you for the gas and transmission. Let’s say that the gas came to $60 and the transmission fees were $40.
For the same amount of gas from energy service provider XYZ, the gas came to $50, but Public Utility Company ABC, which owns the transmission lines, charges $60 to use their lines. Therefore, over all you paid $10 dollars more for your gas.
XYZ charges a monthly fee of a few dollars and often a one-time fee to set up your account — and in small print, if you try to cancel before the end of the contract, there is an additional penalty.
Buyer beware! Just because the nice young man said it was in the contract doesn’t mean it is. Read what you sign, call your current public utility company or public utility commission, and have them explain if this may have unintended consequences to your bill.
Remember the old adage: “If is sounds too good to be true, it is.”