Sunday, February 15, 2009

Gas Man Scam : Update, Part Two

In November 2007 and again in February 2008 this blog warned you about U. S. Energy Savings Corporation and their somewhat shady methods of getting people to sign long-term contracts for natural gas. I noted that the price-per-therm that U.S. Energy was offering was significantly higher than our current and historical average price-per-therm. The company justified this by claiming that natural gas prices were going up, and by locking in the slightly higher cost now, we'd be protected against major increases later.

So now, a year and a half later, it's time to revisit the issue. Were they telling the truth? Would gas prices rise so much that locking in a rate 25 percent higher than the going rate would actually make sense?

My gas price-per-therm (PPT) over the past twelve months ranged from a low of $.76 for February '09 to a high of $1.49 in August 08, with an average PPT of $1.07. The price that U.S. Energy had offered me was $1.09. I don't have access to my older bills, but I suspect that the story they would tell would reduce the overall average PPT by another five or ten cents.

The gas price is only part of the story, however. The Citizens Utility Board (CUB) has tracked thousands of complaints against the company for sales pitches comparing the price of a therm of natural gas to the price of a gallon of gasoline, for charging a contract-exit fee of hundreds of dollars, and for promising customers that they would be protected from upcoming price increases.

Apparently, U.S. Energy is still pulling the same old tricks, only in other states. Even though the New York Attorney General announced a settlement with the company back in July '08, the Canadian bastards are still door-to-dooring their way through the state, signing up unwitting clients for five-year contracts.

The same article quotes a senior VP of U.S. Energy who claims that 90 percent of their customers who stick with the five-year contract end up saving money; but CUB begs to differ--at least in Illinois:

Indeed, data compiled by the Citizens Utility Board show that some Illinois customers who signed contracts with U.S. Energy Savings in 2004 saved money compared with utility rates. But the CUB data also show that every U.S. Energy contract signed since 2005 has been a loser for the consumer.

Overall, 98 percent of Illinois consumers who have signed up with U.S. Energy Savings have lost money, with an average loss of $780 to date, CUB concludes.

I wonder if the company can document how much, on average, their customers have saved? The five-year contract seems to be a gamble that's going to cost you more up front, and might save you a couple of hundred dollars five years down the road. Is it worth it?

Not so much. We're staying on message here in The Green Room: read the fine print before you sign on the dotted line, especially when it comes to a company whose middle name says SAVINGS but whose contracts read NOT GUARANTEED.

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