Complaint Review: Blue Pilot Energy

To Whom It May Concern:

We are PPL (Pennsylvania) residential customers whose current electricity generation/transmission company, Blue Pilot Energy, price-gouged us after our fixed rate expired and we were converted to a variable rate without realizing it.  We are currently stuck paying 500% of the PPL “rate to compare” until our switch to a new provider is processed on March 20.  We are seeking any help available to obtain relief.

My husband and I became customers of Blue Pilot Energy in 2013 through Pennsylvania's energy supplier marketplace. We initially chose a fixed rate, which had a set term. We were not closely watching the dates or terms of our electric generator because we were expecting our first child and were extremely busy.  Shortly before giving birth in November 2013, I (Megan) received a call at home from a Blue Pilot Energy representative.  The rep told me that our initial rate was about to expire and asked us to continue on as customers.

I asked the rep what the current Blue Pilot rate was and what the PPL rate was, and they quoted me a lower rate than the PPL rate to compare. I said that since their rate was lower than PPL, I would continue with Blue Pilot for the time being, and shop again in a few months.  I was focusing on getting ready to have a baby and knew I wouldn't have time to go shop for another supplier anytime soon, so I thought that any savings over the PPL rate was good enough for now.

At no point in this conversation do I recall the rep telling me that I would be going into a variable rate that could change day to day without notice. (Unfortunately, I did not document the date of the conversation or any other details, because at the time I did not realize that I would have to do so in order to protect myself.)  I do not recall receiving any contract or written material following this conversation. 

For the next few months after that phone call, our monthly bill was still within a reasonable range based on past history and usage.  The bill that closed in late January 2014 seemed to be creeping up, so I made a note to shop rates again soon.  My husband and I went back to the PA Power Switch website on Feb. 17, 2014, to compare rates. We found a new supplier with terms we liked. We submitted our request to switch suppliers that day (Feb. 17, 2014), and we have emails to document this. 

On Feb. 22, 2014, we received a massive bill for electricity that was $634.12, several times larger than any bill we'd ever received before (I consulted my 24-month PPL billing history through PPL’s website). I almost passed out from shock when I saw the number.  Upon further examination, the bill showed that our usage had gone up a bit, but the vast majority of the increase was due to a huge rate increase. We thought the rate must be a misprint. Sadly, it was not. We were being charged 44.90 cents/kwh, which is more than 500% of PPL's "rate to compare" (8.754 cents/kwh) during this the time. Just let that sink in—five times the PPL rate!  We were never given any notice of this massive increase until after the fact.

After receiving the bill of $634.12 covering the period of January 17-February 18, 2014, I spoke with Blue Pilot on 2/24/14 (after waiting an hour for an available representative) and was informed that due to "record high usage" affecting the market, they purchased power at a very high rate, and because they were "a small company" they had no choice but to pass the costs along to their customers. 

To add insult to injury, when I called PPL the same day, I was told that the high rate would continue for the current billing cycle (February 20-March 20), even though we had processed our request to change suppliers on 2/17/14, before the last billing cycle had closed. I was told that the supplier switch cannot occur for 1-2 billing cycles due to processing lag time involving the Pennsylvania Utility Commission and PPL under the PA Power Switch process; it often takes 30-45 days to complete. This leaves the customer unable to stop the bleeding even after the wound has been discovered.  In our case, we are being forced to continue with Blue Pilot for more than a month after requesting to switch even though we are not under any current contract with Blue Pilot and have no obligation to pay a cancellation fee to switch. 

During the 2/24/14 phone call with Blue Pilot, the company rep, Lucy, was initially unable to even tell us what our rate would be for the current billing cycle, but after checking with a manager, confirmed that the same high rate would continue for the current billing cycle to end on or around 3/20/14.  She did offer that after the current billing cycle closed, we could start a new six-month contract with a fixed rate for the first two months only. The fixed rate deal had an early termination fee even after the variable rate kicked in—so I would be back in the same risky situation with a variable rate, only this time with a penalty if I switched.  What a joke! 

I made a follow-up call on 2/28/14 and requested more information (again speaking to Lucy), including the start and end dates of our initial fixed rate, the initial rate we were charged, any records they have of the phone call between me and Blue Pilot in Fall 2013, and the rates we were charged in November, December and January.  Lucy told me that a manager would respond to me via email and I have not yet received a response.

While we understand that the unusually cold weather caused electricity rates to spike, it is clearly price gouging when a company takes advantage of this situation to charge such an egregiously high rate compared to standard utility rates, and to sustain that high rate over a significant period of time. I find it very hard to believe that Blue Pilot has “no choice” but to continue this rate for months.  Governor Corbett issued a Proclamation of Emergency on February 5, 2014, due to the “period of prolonged severe winter weather”.    

Under the Price Gouging Act of 2006 (http://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2006/0/0133..HTM), it is illegal in Pennsylvania to engage in price gouging “during and within thirty days of the termination of a state of disaster emergency declared by the Governor.”   The Act defines an “unconscionably excessive price” as being “in excess of 20% of the average price at which the same or similar consumer goods or services were obtainable in the affected area during the last seven days immediately prior to the declared state of emergency.”  It seems to me that our situation with Blue Pilot perfectly meets this test for price gouging.

The fact that the PA Power Switch program would not allow us to change suppliers immediately after we received the first bill is asinine, and a clear hindrance to the concept of consumer choice in a free marketplace.  What other good or service are you forced to continue purchasing from a company for another month at an unadvertised rate that you can't control, when you're not even under a contract?

I can call the cable company to cancel service tomorrow, and am only responsible for any contractual cancellation penalties I agreed to.  Yet in Pennsylvania, I don’t have the same rights in regard to electricity, an essential utility.  I even asked PPL if it would be possible to cancel electricity service to our home and then restart a new account under my name instead of my husband’s.  I was told that it could take up to 7 days to restore electricity to the house. 

If it had been a warmer time of the year when we wouldn’t be risking frozen pipes, and if we didn’t have a small baby and pets to care for, we would have seriously considered shutting down power and abandoning our home for a week in order to get out from under Blue Pilot’s financial tyranny. We could have afforded to stay in a hotel for a week with the hundreds of dollars we’d have been saving.  

Now, the 30-45 day timeframe that it takes to switch providers has made us prisoners in our own home. Blue Pilot's opaque business practices and the subsequent unreasonable delay we face in order to switch providers have forced us to go to ridiculous lengths to conserve energy for the next 30-45 days. Knowing that we have been cornered into paying 45 cents per KwH for the foreseeable future, we've had no choice but to severely restrict energy usage to slow the bleeding. 

We are living with no exterior security lighting, keeping interior lights off except one bulb in the room we’re in, not using the stove or other appliances, air drying all laundry, hand washing dishes, and using the breaker box to cut power to all nonessential portions of our home.  We’re doing all this while both working full-time and caring for a newborn.  We feel like prisoners in our own home, but this is what’s necessary to limit the financial damage and afford child care for a newborn baby and the hospital bills that are still coming. Of course, the money we have to pay for these insane bills is all money we won’t spend at local, Pennsylvania businesses or saved for our child’s future needs.  It’s just going straight to Las Vegas to line someone’s pockets.

In discussing this situation with other affected consumers, it seems that many people do not yet realize that even if they immediately switched providers after receiving their bill, they are still at risk of being charged outrageous rates for at least another month.  The lag time with switching in between billing cycles is very confusing and information received verbally from PPL, the PUC and other sources is sometimes conflicting.  It took me several calls over the course of a week to sort this out.  I believe that a whole second wave of public anger is going to come with the next month’s bills are mailed.  Consumers should be advised to take any possible measures to conserve electricity until new rates appear on their bills.

Blue Pilot is not a local company and they engage in deceptive business practices, seeking to take advantage of Pennsylvania customers who are unfortunate enough to fall for their teaser rates and aren't able to constantly monitor their unpublished, unannounced rate changes in order to protect themselves. Please help inform the public so others don't gamble and lose on this Las Vegas company like we did. 

Any help your office can provide in forcing Blue Pilot, PPL and the PUC to make this situation right for affected customers like us would be greatly appreciated.  Moreover, laws should be changed so this never happens again; most urgently, the process for switching power suppliers should become immediate. 

We suggest that a reasonable remedy for currently affected customers would be for Blue Pilot and other companies who rate-gouged their customers to adjust these bills to reduce the charges to no more than 20% higher than the PPL “rate to compare” for the applicable time period.  This relief would be especially appropriate now considering the Governor’s declared State of Emergency, the 20% test found in the Price Gouging Act, and the overwhelming demand for help from the public.