Pa. to electricity suppliers: Fix billing problems

The Pennsylvania Public Utility Commission, responding to an Inquirer article about potential overcharging by several residential electricity suppliers, has called upon the power industry to comply with PUC billing regulations.

In a letter dated Friday, the PUC ordered the state's electric utilities and more than 100 licensed electricity suppliers to disclose any billing irregularities and "planned corrective measures."

The PUC's letter was prompted by a May 15 Inquirer article that showed how a Brooklyn electricity supplier had failed to disclose its rates on customer bills, and how another supplier had mistakenly billed 5,770 residential customers for sales tax.

The PUC, concerned that the billing goofs could undermine consumer confidence in Pennsylvania's nascent deregulated electrical markets, gave the suppliers until June 10 to account for their billing practices.

Irwin A. "Sonny" Popowsky, the state's consumer advocate, whose office had pursued two complaints from Inquirer readers, welcomed the PUC's letter.

"Once the commission learned of the problems, it acted promptly and proactively," Popowsky said. "This kind of response is necessary in order to maintain confidence in the electric market."

Under the state's Electric Choice Act, which took full effect Jan. 1 for Peco Energy Co. customers, traditional utilities such as Peco became solely distributors of power.

Customers can choose an alternative supplier that generates the power, often at a discount, or they can allow Peco to provide service at a default rate known as the "price to compare." About 300,000 of Peco's 1.6 million customers have switched since Jan. 1.

Although Peco bills customers on behalf of the suppliers, the utility says it does not review the information and is not responsible for supplier billing lapses.

One supplier, Respond Power L.L.C. of Brooklyn, failed to comply with PUC regulations that require it to state on the bills the amount it is charging per kilowatt hour.

"We view this as a serious deficiency that deprives customers of information necessary for them to fully understand the rate they are being charged," the PUC said in its May 27 letter.

The PUC said the lack of information was particularly worrisome for customers who signed up for variable rates, which change monthly according to market conditions.

Indeed, Havertown customer Gloria Levinson signed up for a variable rate with Respond Power in February. At the time, the Brooklyn company's advertised price was 8.4 cents per kilowatt hour, about 15 percent less than Peco's price to compare.

But by the time Levinson received her first bill in April, for electricity consumed in March, Respond Power charged her at a rate of 9.4 cents per kilowatt hour, though the rate itself was not spelled out on her bill. Respond's rate amounted to only a 5 percent savings off Peco's price.

Saul Horowitz, the chief executive of Respond Power, blamed the billing problem on a third-party contractor. He said his company had taken over the function.

But Respond Power's problem appears to be more than the failure to disclose its rate on its bills.

It also appears to have overcharged Levinson, according to its own stated rates.

According to Horowitz, Respond's rate was 8.49 cents for power consumed in January and February - not 8.4 cents as stated on the PUC's public website.

Horowitz said the rate increased to 8.89 cents in March and to 9.29 cents in April. He said it went up to 9.69 cents for May consumption. At that rate, it was only 3 percent below Peco's price.

Levinson's April 6 bill was levied at 9.4 cents per kilowatt hour - a half-cent above the rate that Horowitz said was in effect at the time. Last month, her bill reflected a rate of 9.52 cents.

During the two months Respond has been supplying Levinson's power, she has saved a mere $2.52.

Horowitz blamed the rate on "a glitch" in the system. "We were upset to read about her situation and will work to remedy it," he said.

"Additionally, we have undertaken an internal audit of all billing that was handled externally to ensure there are no other cases like hers out there."