In today’s AUSenergy News Update: Switching suppliers causes retroactive rate hike for some, PaG&E to pay $2.3M more in refunds over electricity rate hikes, and Wisconsin PSC endorses controversial power transmission project.

Obscure regulation causes retroactive rate hike when some electricity customers switch suppliers

Summary:   In 2000,  shortly after Massachusetts allowed competition among electricity suppliers, they implemented ruling to prevent suppliers from working the system, moving customers from a basic fixed-rate plan to another plan depending on that month’s prices.  Residential customers and small businesses are automatically given the fixed-price option unless they choose otherwise. So under this ruling, if a person paying a fixed rate leaves one supplier and moves to another in the middle of a six-month rate period, they must be billed retroactively for the variable price for the months in which they received service. With customers not understanding the implications of this ruling, customers looking for more competitive rates have switched suppliers, only to find themselves billed for hundreds of dollars retroactively.

AUS Comment:   Having a full understanding of the terms and conditions of any supplier is your first line of defense in pricing. And that is why it is a smart choice to go with an energy consultant who can explain exactly how these terms work.

PaG&E to pay $2.3M more in refunds over electricity rate hikes

Summary: PaG&E has agreed to pay $2.3 million in refunds to settle allegations of deceptively marketed variable rates, in addition to the $4.5 million they have already paid. The settlement also imposes an 18-month moratorium, beginning March 1, on the selling of variable rate contracts by PaG&E. The company must offer fixed-rate contracts for terms longer than six months during the moratorium.

AUS Comment: We can’t say it enough – buyer beware! Variable rates are a dangerous way to go, for though they may be lower one month, the next month they could soar. We recommend staying with fixed rates for no surprises.

Wisconsin PSC endorses controversial power transmission project

Summary: Wisconsin regulators endorsed the Badger-Coulee high-voltage transmission line Thursday that will bring 1,400 MW of renewable energy — mainly wind — into the Midcontinent Independent System Operator region from Western states. In doing so, they rejected critics’ claims that the project is not needed and would discourage distributed generation development while protecting the “utility industry structure.”

AUS Comment: This roughly 180-mile line could cost upwards of $580 million.  This is taking what looks like a good thing – bringing renewable energy into the state – but bringing it in, not locally, but from Western states via an expensive transmission line. What happened to encouraging the production of locally produced renewable energy, thereby eliminating expensive transmission lines? Though this is a step in the right direction – it is a misstep for local energy.