Senator Pugh Hopes Educated Energy Consumers Can Avoid Scams

On Tuesday, Governor Martin O'Malley signed into law a bill that will require the Pubic Service Commission (PSC) to take more steps to educate consumers about their choices in purchasing electricity, including a section on the PSC's website.

Maryland State Senator Catherine Pugh, District 40 (Baltimore City), a lead sponsor of the bill, said consumers "have choices" in deciding how to buy energy "but most don't know how to choose nor do they  understand the process".

Pugh also said that the law may help to prevent uneducated consumers from becoming prey for unscrupulous salespeople that go door-to-door representing energy companies.

What Pugh was referring to is a story I reported on last week about a team of salespeople that were in the Baltimore City community of Violetville one recent afternoon trying to sign up new customers for the energy company they represented.  The team used somewhat unscrupulous sales pitches, often times to elderly residents.

(See video that captures unscrupulous door-to-door sales tactics.) 

Here is the rest of that story:

A little background first.
 
In 1999, Maryland deregulated energy.
 
According to the Baltimore Gas and Electric (BGE) website, deregulation "allows consumers to purchase their gas and/or electricity supply from any energy supplier that is licensed by the Maryland PSC" and registered with a utility company that delivers the energy.  In the Baltimore area, that company is Baltimore Gas and Electric.
 
Consumers may choose to continue getting their energy directly from BGE.
 
The approved energy suppliers may or may not provide energy cheaper than BGE does.

BGE does not buy the energy from the companies and then deliver it to the consumers.  The consumers buy the energy from the suppliers and then BGE delivers it to the consumers.
 
The sales team in Violetville was misrepresenting themselves to residents.
 
A saleswoman for the energy company said that she was "working with BGE" to find out "who was set up to receive a discount on their BGE bill".
 
When asked directly if she was "selling energy," she said, "No.  We're seeing who has set-up their discount on their BGE bill".
 
A salesman said that the sales team was in the neighborhood to "verify who has a discount."
 
That is not true.
 
Here are the facts:

BGE does not currently offer discounts on energy bills and no company "works with BGE" to discover if consumers are receiving a discount on their bills.
 
If BGE does offer discounts or reduced rates, the company will inform consumers directly.
 
A man answering the telephone at the BGE customer service center said that energy suppliers "do not work with BGE," beyond normal business practices, and no company will help BGE to "set up discounts" on bills.
 
The man at BGE said that a company is listed on the BGE website as an approved supplier if they have good credit and good business practices.
 
The saleswoman for the energy supply company was misleading consumers.
 
The "discount" the saleswoman said consumers are entitled to on their bills would be the promised cheaper rates for energy the company would supply.
 
There are many senior citizens in Violetville and they may not catch the bait-and-switch like tactics used by this sales team.
 
Here is what BGE suggests before signing with an energy supplier:
 
Before signing a contract with a new supplier, be sure the company is licensed by the PSC and registered by BGE. You may want to consider each supplier's offers, such as does the supplier offer a flat rate, does the supplier charge the market price – which may vary; or does the supplier guarantee a discount vs. BGE's price. You may also want to consider the length of the contract and whether or not the supplier charges an early termination fee, etc. There may be other factors that are important to you. For example you may be interested in an electric supplier who offers green power, such as solar, wind or hydro power.
 
Again, please be warned that:
 
BGE does not offer discounts on energy bills and no company "works with BGE" to discover if consumers are receiving a discount on their bills.
 
If BGE does offer discounts or reduced rates, the company will inform consumers directly.

Pugh said the Consumer Education law will "help consumers avoid such unscrupulous behavior such as that depicted in the video and the subject of your article".

Read more of Sean's blogs at:

http://www.examiner.com/community-in-baltimore/sean-tully

http://www.examiner.com/political-buzz-in-baltimore/sean-tully