A Catholic school recently filed the first complaint leveled against a private power supplier since Rhode Island deregulated its electricity market six years ago.
In a petition filed with state utilities regulators on Aug. 8, Mount Saint Charles Academy of Woonsocket accuses Berlin, Conn.-based Select Energy Inc. of “slamming,” or taking the school off Narragansett Electric service and enrolling it as a Select Energy customer without the school’s knowledge.
The switch happened in June 1999, and Select Energy dropped the academy a month later, according to the petition, which was filed with the state Division of Public Utilities and Carriers.
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Mount Saint Charles has been a Narragansett customer ever since – but it has been paying higher rates. That’s because, by state law, once a customer leaves Narragansett for a private supplier and then comes back to the utility, it must pay what’s called a “last resort” rate, which invariably is higher than the standard offer.
The result: Mount Saint Charles Academy has paid some $43,000 more than it would have paid if it had never been taken off Narragansett Electric service. It continues to pay the premium rate.
Donna Powell, a Select Energy spokeswoman, said the company has received a copy of the petition, but it “can’t comment on pending legal matters.” Select Energy is a subsidiary of Northeast Utilities, also based in Berlin, Conn.
Mount Saint Charles says it did not realize the situation until earlier this year, after it hired an energy consultant to see if it could trim its energy bills, according to the petition.
The consultant, James M. Grasso, said in an interview that he noticed in a review of the school’s past bills that it had been unwittingly switched to Select Energy in 1999 and then bounced back to Narragansett a month later.
Mount Saint Charles is asking that the DPUC require Select Energy to pay the school more than $43,000, or the difference of what it would have been paying had it never left Narragansett. It also is asking the state to fine Select Energy $1.5 million, or $1,000 for each day for Select Energy’s “illegal action.”
The school also wants to be returned to the standard-offer rate.
A spokesman for the DPUC, Terry Mercer, said a pre-hearing conference likely will be set, where the two sides can offer briefings and a hearing officer will decide how the case will proceed. The division ultimately will determine whether Select Energy violated state rules governing non-regulated energy suppliers.
Grasso, who filed the petition on behalf of Mount Saint Charles, along with law firm Adler Pollock & Sheehan P.C., says it’s understandable that the school was unaware it had been switched. He said switching a customer from Narragansett Electric to an outside electricity supplier if fairly simple, and rests largely with the supplier itself.
Amy Atwood, a spokeswoman for Narragansett Electric, said non-regulated power suppliers must tell Narragansett that the customer now has a new supplier, and must provide the customer’s account number. The customer then is notified on the next bill that its service for electricity generation has been switched to a different supplier.
“At that point the customer should realize ‘no, I didn’t do this’ and contact the supplier and contact us,” Atwood said.
But since the bill still comes from Narragansett Electric, Grasso said most customers wouldn’t scrutinize their statements closely enough to know they had been switched – or to know that they were suddenly paying the last-resort rate.
“Small- and mid-sized accounts don’t really look at their bills. They pay the bill and move on,” Grasso said.
A May 8 letter from Grasso to Select Energy, contained in the filing, says that Select Energy’s enrollment of Mount Saint Charles might have been part of an “umbrella agreement” to supply electricity to certain members of the Diocese of Providence. But Mount Saint Charles should not have been included in that contract, the letter says.
Narragansett’s last-resort rate for August is about 19 percent higher than the standard offer, which is the rate that some 99 percent of its customers pay.
Only about 1,300 Narragansett customers are paying the last-resort rate – virtually all of them commercial or industrial users. These are customers that bolted from Narragansett in the late 1990s, after deregulation, in search of a cheaper rate from private power marketers, only to return to Narragansett after a number of those suppliers pulled out of the state.
Over the past two years, however, a handful of large energy users have been able to beat Narragansett Electric’s price by signing contracts with outside suppliers, according to Roger Buck, executive director of The Energy Council of Rhode Island, which represents 75 large energy users.
Buck said that to his knowledge, the group’s members – which include hospitals, colleges and large manufacturers – have had no serious problems with Select Energy.
“Not one single member of TEC-RI has ever been switched without its consent,”
Buck said.
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