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AG punishes 2 energy companies

Ambit Energy’s New York electric and gas customer-service map.
February 22, 2019 10:02 pm

ALBANY — Two energy service companies will be paying out more than $2 million in reimbursements for overcharging and misleading their customers, according to the state Attorney General’s Office.

Energy Plus issued $700,000 in payments to current and former customers following a 2017 settlement and Ambit Energy, which serves Greene and Columbia counties, will be required to change its business practices and pay $1.5 million in penalties for deceptive practices, state Attorney General Letitia James said in a statement Thursday.

The two energy companies serve gas and electric customers in the state and used deceptive practices that “resulted in consumers paying more for energy services when they were promised savings,” according to the state Attorney General’s Office. The energy service companies purchased energy on the open market and sold it to consumers on behalf of utility companies and promised lower rates to their customers.

But that did not happen in many cases, according to the state’s top attorney.

“Thousands of New Yorkers will get their money back after they were deceived into paying for more expensive energy services,” James said in the statement. “Energy Plus and Ambit are just two of the multiple unscrupulous energy service companies that the Attorney General’s Office has challenged in our ongoing effort to protect consumers. We have zero tolerance for companies seeking to defraud New Yorkers out of their hard-earned money.”

The Attorney General’s investigation from 2017 found that Energy Plus told customers they would receive competitive energy rates through mailings and email advertisements, while telemarketers promised potential customers “market-based” rates. But the opposite was true, according to then-Attorney General Eric Schneiderman.

Ambit Energy serves gas and electric companies all over the state, including Greene and Columbia counties, according to its website. Energy Plus serves customers in the state, but is no longer accepting new customers in New York, according to its website. It is unclear how many customers from Columbia and Greene counties will receive refunds. The state Attorney General’s Office did not have a breakdown Friday of the number of customers and how many of those will receive refunds in each county.

Ambit and its subsidiary companies were ordered to pay a $1.5 million penalty as a result of an investigation that found the company signed up consumers to Ambit without their approval and signed consumers on to a more costly energy plan without adequate notice.

Both companies are required to take action to prevent deceptive practices in the future including “adequate training of customer service representatives, refraining from misleading advertising about savings and implementing appropriate disciplinary procedures for violations of the law,” according to the Attorney General’s office.

Ambit Energy and Energy Plus did not immediately return requests for comment Friday.

The real sham and scam presented by these abusers of the elderly and strapped energy consumer is that they artificially inflate the prices of energy costs above market, just the opposite of their intended effect of offering competition and open market where utilities enjoy a functional monopoly and hold a population captive.

Instead of reporting to us what energy prices were several months ago when our bills were generated, utilities should be required to report what our unit price charged was versus the documented spot market price during the time we are being billed, and they should be required to provide documentation and proof justifying the variance. I doubt, somehow, that they can provide many examples of where they paid BELOW the prevailing rate and passed the savings to the consumer. Middlemen are being used to inflate delivery prices and gouge consumers. Right now, energy costs, particularly natural gas, are low. Wait until Trump gins up a war in Iran or something similar and the market for energy experiences a spike. Who will pay? We will.

There should be a mechanism with teeth to protect consumers from being gamed by speculators in the energy market and exploited by hype driven "Energy Plus" type operators who can't deliver the savings they promise. The AG having to sue and then recover fines that never really benefit the consumer even falls short of putting the milk back in the bottle.