Watchdog: July 22, 2012

More than 25 Connecticut residents have written to me complaining about Energy Plus, a New York company, that is a supplier of electricity in the four-state area.

Soon, these residents and others will have an opportunity to take legal action as part of a series of suits seeking class action against the firm, headquartered in Philadelphia.

D. Greg Blankinship, of the White Plains law firm of Meiselman, Denlea, Packman, Carton & Eberz, has brought a federal suit against Energy Plus in the U.S. District Court for the Southern District of New York.

Blankinship told me that the accusations his firm is making in New York apply equally in Connecticut, where a similar class action request will be sought.

The New York suit claims that Energy Plus Holdings has "deceptive advertising and billing practices" that "have caused tens of thousands of New York consumers to pay considerably more for their electricity than they should have otherwise paid."

Energy Plus declined to respond to individual claims, noting that the case is in court, other than to say that an earlier complaint against the firm was tossed out.

"As I'm sure you can appreciate, we are unable to comment on any of the details because this is an active litigation. However, I am able to say that we believe the allegations are without merit and a majority of the claims originally alleged by the Plaintiff were dismissed by the Court in initial motions to dismiss. We follow all state guidelines and regulations in NY and in every other state in which we operate," Paul Frantz, chief marketing officer, wrote me.

The revised suit accuses the firm of luring "consumers into switching electricity suppliers based on offers of frequent flier or other travel reward points, or offers of 'cash back,' and by falsely promising to charge competitive rates reflective of prevailing market conditions."

"Unfortunately for New York consumers, however, there is nothing 'competitive' about Defendant's rates, which bear little relation to prevailing market conditions. As a result, New York consumers are being fleeced tens of millions of dollars in exorbitant charges for electricity," the suit says.

The suit says that Energy Plus' charges "exorbitant rates for electricity," at times two to three times as much at public utilities charge.

"Energy Plus uniformly and consistently markets its electricity sales in print and on the Internet by offering consumers a choice of 'rewards,' such as points for airline or hotel rewards programs or cash back. For example, Energy Plus entices consumers by representing in its mailers that consumers 'will earn miles while still receiving the same reliable service from your local utility company. The best part is that nothing about your service will change.' "

"Similarly, on its website, Energy Plus represents that "when you choose Energy Plus, you'll receive the same energy services you've always had plus your choice of rewards just for paying your energy bills. These statements are materially misleading because consumers do not receive the same energy services but instead receive energy services that are substantially more costly; moreover, these 'rewards' are worth far less than the difference between Energy Plus exorbitantly high rates and those offered by reputable energy suppliers."

If you want to compare rates charged by CL&P and UI and private suppliers, start your research here: ctenergysavings.com/epp/energy_provider_plans.

You can reach The Watchdog at george@ctwatchdog.com and www.ctwatchdog.com.