Be wary of big bill when power contract expires

August 23, 2011 4:25:23 PM PDT
We have a frightening warning about your power contract which is easy to overlook, but costly if ignored. If your power company contract ends without you knowing, it could cost hundreds of dollars per day as some people found out.

If your power contract comes to an end and you do not choose a new plan, your provider picks one for you. One local man says the plan he was put under caused sent his $300 monthly bill reach $300 in just a few days.

Robin Janson is like everyone else with electricity. He has a contract with a power provider and like everyone else he did not think much of it. But that changed when Janson's contract ended.

Because Janson did not pick a new plan, one was chosen for him by his provider, Champion Energy. That new plan was tied to the spot market price for electricity which jumped about 700 percent just as Janson was put on the plan.

"The entire month of July our energy bill was $338. For two days outside of our contract, our bill was $306," said Janson.

Power companies must alert consumers when their plans are coming to an end and Janson admits he did get inserts with his bill, but never looked at them. Janson also says email alerts from Champion did not pass through his spam filter so he did not see those either. But when the bill came in, Janson called his provider.

"They did offer, gladly offer, to do some sort of payment plan," Janson said.

Champion Energy has since done a lot more. A spokesperson says dozens of consumers saw the price spike and the company is retroactively cutting the cost of the out of contract days and charging the annual contract price.

"We are going back to all the folks affected and giving pretty deep discounts for those days that customers experienced those price spikes," said Michael Sullivan with Champion Energy.

That's not all. Champion is changing its policy for consumers whose power plans expire.

"We are going to go away from the index product and go to a variable product," said Sullivan.

That means Champion customers whose plans expire will be placed on a more stable month-to-month plan.

This serves as a reminder to everyone to be sure to read all the inserts with your bill and if you see something that says your plan is expiring, call your provider right away.


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