The lure of deregulation has been increasing in recent years as state and local governments look for ways to reduce the size of government and ease regulatory burdens. One area in which deregulation has taken hold is residential electricity. Prior to deregulation, retail electricity suppliers had to file the specific kilowatt per-hour rate they would charge electricity consumers, and they were forbidden from charging more than that rate.
However, many states, including New York, Connecticut, and New Jersey now allow independent, alternative electricity suppliers to compete against established utilities like Connecticut Light and Power and ConEd by purchasing electricity at wholesale rates on the open market, which they then sell to consumers at market, and theoretically lower and more competitive, rates. Unfortunately, consumers report that companies like Spark Energy actually charge rates that are far higher than the “market” rates they promise. While many independent energy companies (called “ESCOs”) offer competitive rates and green energy options that utilities do not offer, some ESCOs have apparently turned to unfair and potentially deceptive practices to maintain their exorbitant profits.
We are investigating whether Spark Energy is deceiving consumers about its rates. Spark offers customers a fixed, and usually reasonable, rate for a one year period. What Spark only discloses in the fine print is that it switches customers to a “variable” rate when that time expires, and invariably this rate is much higher than rates otherwise available in the market. Spark Energy claims that its variable rates are based on “market conditions.” However, this may be a deceptive misrepresentation, as many consumers report that Spark Energy’s rates are in fact substantially higher than the rate other suppliers are charging. At the very least, Spark Energy apparently fails to inform consumers that their electricity rates are substantially higher than market rates. If you or someone you know is a customer of Spark Energy, or any other independent supplier you believe may have misrepresented the true amount of their electricity rates, please contact us to discuss your legal options.