Gowanus Lounge: Serving Brooklyn

A Very Helpful Energy Scamming FAQ

January 27th, 2009 · 6 Comments

[Photos courtesy of Katia Kelly/PMFA]

We’ve run so many posts about energy scammers running all over Brooklyn lately it makes our blood boil. (Even more so that mainstream media haven’t focused on this story like a laser beam and that consumer protect officials haven’t gone after these people like crazed jackals.) Here’s a really helpful email from Tom Gray at Council Member Bill de Blasio’s Office, in whose district energy scammers have been particularly active:

Have you been a victim of Energy Service Company (ESCO) slamming? Were you asked by someone representing themselves as a ConEd worker to see your energy bill, later to be sent a bill from a new energy company? Were you told by a door-to-door salesman that switching to another energy company would lead to great savings on your energy bill, later to receive a bill higher than ever before? When you tried to break your contract with the ESCO, were you told that you would have to pay an extreme fine?

Frequently Asked Questions:

What is an ESCO?
An ESCO (Energy Service Company) sells gas and electricity directly to customers, while utility companies (such as ConEd) continue to deliver the energy. ESCOs often promise that purchasing energy privately will save consumers money, but consumers are then required to pay bills both to the utility company and to the ESCO. As the energy bill is split, customers often end up paying more in the long run.

How can ESCOs manipulate consumers?
The most common way consumers are manipulated by ESCOs is through teaser rates, or lower rates that customers are promised as a way to save on their energy bill; however, rates often increase dramatically after a few months. Some ESCOs also misrepresent themselves as ConEd workers to gain access to customers’ accounts and use this information to sign them up for a service. Some ESCOs also charge a large fee for customers who wish to end their services.

How can I protect myself if I wish to use an ESCO?
If you wish to use an ESCO to save money on your energy bill, be sure to read a full contract before signing anything. You should beware of fine print that may explicate rate increases or early termination
fees, and compare the ESCO’s rates with the rates of your utility company, as well as other ESCOs, before signing. Furthermore, beware of door-to-door salespeople who claim to represent your utility – your utility company would not come to your door to ask to see a copy of your bill.

How am I protected from ESCOs’ abuse?
The New York State Legislature is currently processing a bill creating that will place restrictions on ESCOs. The proposed bill requires that ESCO workers correctly identify themselves, places restrictions on termination fees, provides consequences that will be places upon ESCOs who violate the law, and requires that ESCOs provide customers with an “ESCO Consumers Bill of Rights” which will be determined by the public service comminssion and the Long Island Power Authority. Council Member Bill de Blasio supports this legislation and is working towards creating similar protections at the city level.

If you feel that you have been manipulated by an energy service company, please share your story with us. Council Member Bill de Blasio supports the rights of energy consumers and wants to make sure
you are protected. If you have information to share on ESCO slamming, please call Tom Gray at Bill de Blasio’s district office at 718-854-9791 or email at tagray1@gmail.com.

Tags: Energy Scams

6 responses so far ↓

  • 1 fort90 // Jan 27, 2009 at 4:55 pm

    Here’s a fun fact: I was recently a victim. Best part? The people involved were my ex bosses.

    A few months ago I got a knock on the door. Some guy representing my old company IDT, their new energy department. Automatically I foolishly trusted the guy. He asked to see my Con Ed bill and said it was too high (which it was, but that’s because I had two ACs cranked all day long… I work from home btw), and then explained that I might qualify for cheaper energy rates. All I had to do was sign my name on some form to get the process started, and that I would be contacted in a few days, to be told if I was indeed a candidate and to formally sign me up.

    Weeks passed and no contact, but I didn’t even notice it. Then some other dude showed up, saying the same basic stuff as before. I explained that someone had come previously but never follow-up as promised. He apologized and then assured me that this time he would definitely follow-up. Once again, I was asked to sign something… which I did once more, without bothering to look what it was.

    Again, no phone call, but I did get an email from Con Ed stating that they received my request to change my energy provider, and how if there was ever an emergency, I could sill call them. I dug out the thing I had signed and looked at it closely for the very first time: it was a contract, which I was completely unaware of.

    I called Con Ed and explained that I had signed up under false pretenses, and the person couldn’t give me a straight answer for a variety of reasons, but basically indicated that its been happening a lot. I was then told that there was no problems changing back my energy provider, it was my right as a consumer, though there was always a massive fee involved.

    I next called IDT, and instead of yelling and screaming like I normally do, I played the cool as a cucumber card, but also sold myself as an ex-IDT employee that wants the company to do well and under the assumption that there was some kind of mistake and that I wasn’t the victim of a stupid scam. The woman I spoke with pretended to be shocked by the events and cancelled my account without a charge… though she asked like 19 times if I was sure I wanted to switch. The Con Ed person explained to me that alternate energy suppliers do sometimes provide energy at a cheaper rate… but on IDT, which was without a doubt the most expensive.

    So moral of the story? ALWAYS read the fine print, as stated above.

  • 2 Deb // Jan 27, 2009 at 9:11 pm

    I did have those folks try to check out my bill at my store. I knew something smelled fishy when they didn’t have any ID and tried to pass themselves off as working for ConEd. Glad I said thanks but no thanks.

  • 3 Jorge I. Montalvo` // Jan 27, 2009 at 9:12 pm

    For those who may be looking for the most up-to-date information related to ESCOs, including new rules promulgated by the Public Service Commission, visit the New York State Consumer Protection Board website’s ESCOs page:


  • 4 Memories of the Bush Administration - City Room Blog - NYTimes.com // Jan 28, 2009 at 11:25 am

    […] your utilities bill increase inexplicably? How to tell if you are the victim of an energy scam. [Gowanus […]

  • 5 jackQ // Feb 2, 2009 at 5:37 am

    I was prepared — since I was aware of the ESCO folks and saw them trolling the neighborhood with clipboards.
    ESCOers visited me four times, and I was ticked off by their misrepresentation and chutzpah:
    — Two guys wore fakey “utilities” uniforms, and the uninformed/unaware easily could have mistaken them for Con Ed workers.
    — … Especially since all four implied some sort of fuzzy connection to Con Ed, i.e., “I’m here about (or to discuss) your Con Ed bill.”
    One woman really aced it: As soon as I opened the door, she barked, “I WANT TO SEE YOUR CON ED BILL” – with mega-aggressive pose and attitude, as if she had a few galaxies to run and I was putting a crimp in her day.
    They didn’t take polite “go away” hints, but just kept blathering on. These days, when an ESCOer shows up, I just do a firm “No” and close the door.

  • 6 Now On The Blog Roll Of Gowanus Lounge Dot Com: IDT Energy | newyorkshitty.com // Feb 22, 2010 at 6:22 pm

    […] What is an ESCO? […]