[5-Feb-2016]: It has been a little over a year since I realized that Direct Energy had broken their contract. Every time I see their logo, I feel bad for all of their employees and
[25-May-2015: added a view from T&C document showing start date requirement, clarified associated verbiage, updated status]
[9-Mar-2015: edited for clarity, added CL&P statement regarding service date, added table showing billing cycles, removed names, updated current status]
Note - Connecticut is a deregulated electrical market, and Direct Energy is a 3rd party supplier. Suppliers contract with customers to provide electricity, and separately contract with the utility to administer the bills for that electricity.
Summary:
Direct Energy broke their contract with me. After breaking their contract with me, Direct Energy implemented predatory pricing on my electric bill. The below data demonstrates that Direct Energy failed to meet contractual requirements and that a credit to my account is due.
Contract date:
My family signed a contract with Direct Energy on Thursday, 21-Nov-2013. (An aggressive door-to-door sales person came by while I was at work).
Service start date:
I checked with the utility (CL&P) regarding the actual start date of service from Direct Energy:
"The original electronic enrollment for Direct Energy was received on 11/26/13"
CL&P (aka the "EDC") made Direct Energy's request active at the beginning of that billing cycle. The first day of the first billing cycle that Direct Energy was able to bill me for electricity was Tuesday, 26-Nov-2013.
Contract term:
Contract term:
Easy enough, right? Fixed rate of .0819 cents per kWh for 12 billing cycles.
What was actually billed
On top of that, Direct Energy tells me that they must only provide 365 days of fixed rate service (ie CL&P billing cycles don't really matter, and neither does the term written on the face of the contract). Using that logic, Direct Energy raised my rate (internal to Direct Energy book keeping) on 21-Nov-2014 up to $0.1529 per kWh, assumed that my daily electric consumption was constant throughout the month, averaged the result, and then charged a "blended" rate for all 32 days of the billing cycle.
Basically, Direct Energy erroneously started "billing" me before they were actually suppling my home with electricity. This error caused Direct Energy to make a rate error prior to the end of our contract.
Why does that rate error matter?
The rate during the 12th billing cycle matters because Direct Energy had already failed to meet their contractual obligations in a different way:
The contract requires that Direct Energy provide written notice of any pricing changes prior to implementing them
I received exactly zero pieces of mail from Direct Energy in the months prior to the rate change.
Direct Energy claims that they had "sent" me a letter sometime during October.
When I asked what proof existed of notification actually being sent, I was informed that there is no proof, and that there's no way to know for sure whether a letter had in fact been sent......but......since Direct Energy couldn't find any record of any "undeliverable" or "returned" mail, and since the contract actually only says that they must "send" notice (ie not technically required to actually "notify" me), that means that a letter must have been sent, that I must have received it, and by not responding I was agreeing to pay whatever bill they decided to charge.
Direct Energy decided to nearly double my electric rate without actually notifying me.
The first time I was made aware of this debacle was when I saw the very large "variable rate" bill...I immediately called Direct Energy to find out why I was being charge such an absurd rate and what they would do to fix it. The "customer service" personnel I spoke with kept declaring that there was no error, the account was billed correctly, and that I owed the full amount.
Eventually I realized that the only way to make the invalid charges go away is to show that there was in fact a billing error. This is why Direct Energy's error regarding billing cycle dates and the resulting charge during the 12th billing cycle matters. While I am unable to prove that Direct Energy did not "SEND" me a letter, I CAN prove that the 12th billing cycle was executed improperly.
Since the 12th billing cycle was not billed correctly, the "initial term" was not completed. Once Direct Energy acknowledges this, their unjustifiably high rate charged during subsequent billing (up to nearly 16 cents per kWh, relative to the barely over 8 cents from the contract) becomes invalid and will have to be refunded or re-billed.
Then what happened?
After Direct Energy customer service failed to acknowledge that I had been overcharged, I called CL&P. The CL&P representatives were sympathetic, but pointed out that they have no power over the 3rd party generation billing and that I would need to work it out with Direct Energy.
I then contacted the Better Business Bureau (BBB). They facilitated some contact with Direct Energy, but suddenly and inexplicably closed the complaint administratively. This occurred immediately after a Direct Energy employee sent a verifiable lie to the BBB about my bill. I emailed the BBB asking them to re-open the complaint so i could post the truth and a copy of my bill to refute the lie, but the BBB refused to review my bill, refused to review the contract verbiage, and refused to re-open the complaint.
To set the record straight, below is the email from one "Mr. Jenkins"....
....and a screenshot from the bill in question:
Note that the bill from the utility says absolutely nothing about 4 days of variable rate charges like Direct Energy claims. It DOES however, show a rate that was above what Direct Energy contracted with me to provide.
Direct Energy lied, and the BBB refused to verify the facts.
I'm reminded of this Dilbert....they started off strong with the uncheckable "we sent you a letter" claims, but the actual bills are very easy to verify.
I am continuing to follow up with other resolution avenues. Additionally, I have raised this to the attention of the Connecticut Attorney General.
The great irony of the whole situation:
- Direct Energy claims to abide by ethical business principals
- Direct Energy claims that it cares about its customers and that disputes will be addressed in "an efficient, fair, and timely manner"
- Direct Energy has no doubt spent over $100 in wages for complaint analysts in its refusal to acknowledge about $100 of billing error.
What happens next?
- If you are a Direct Energy employee, you can talk to your boss or your boss' boss about whether this is the way Direct Energy ought to be conducting business.
- If you are currently a Direct Energy customer, you can reconsider your choice to do business with Direct Energy.
- No matter who you are, you can share my experience with others, hopefully sparing someone from going through a similar ordeal in the future.
As of 25-May-2015, this dispute is still unresolved.
TL;DR - If Enron and Comcast had an ugly baby, it would be named "Direct Energy".
