Utility rethinks customer service after news report

NEW YORK, NEW YORK - A Canadian power company that jolted several New York businesses with confusing energy contracts has made amends with several businesses following a New York Daily News report.

Based on promised savings, shopkeepers in Queens and Brooklyn switched to U.S. Energy Savings but said in February that their electric bills actually soared. When they complained, they claimed they got the runaround before being told canceling their contracts would cost them $10,000 apiece. Francis Pullaro, director of regulatory affairs for U.S. Energy, acknowledged a communication breakdown with customers. "We had our original product out there that was causing some volatility in many of our customers' charges every month," Pullaro said. The company has set up an eight-person task force to deal with customers' inquiries about a fixed-price product they marketed in New York in the past two years, he said.

"It wasn't that we ignored the customer before but, by having certain people dedicated just to this subset of inquiries, they can resolve the complaints a lot faster," he said. Customers of U.S. Energy told the Daily News they were persuaded to switch from Con Ed by door-to-door sales agents. They were told the company offered fixed-price electricity for five years, which could save them at least $200 to $300 per month. But what they didn't know until they got hefty bills was that the so-called fixed price is, at most, half-fixed. An item on their bills labeled customer charge fluctuates with the electric market and could make the charges twice their normal level.

Although that's in the contract, customers said they weren't told about it or about the hefty penalty for quitting the five-year agreement early. Erik Goetze, owner of Blue Sky Bakery in Brooklyn, said the customer charge on his bill rose to $1,035 in the months following his switch. Several calls to U.S. Energy's customer service line shed no light on the matter, he said. "I just want it to be simple like my credit card bill I can read the bill and know what's been paid and where the money went so I can budget my costs," Goetze said. In March, after the Daily News' report, Goetze wrote to the CEO of the Toronto-based company and got quick results.

First, a New York rep called to explain, then came a letter from Con Ed notifying Goetze he'd been switched back with some credits. "This is not what I asked for, but I am more than happy to be switched back without the penalty," he said. Pullaro said customers can now transfer their contracts to the company's new model, and U.S. Energy will consider dropping termination charges in some circumstances, he said. The new arrangement seems to be working. According to the state Public Service Commission, there were 19 complaints against the company in April, down from a monthly average of 48 earlier this year.

"Complaints are now declining, indicating that the company is handling customer inquiries as they contact its call center," an agency spokesman said. But the city Department of Consumer Affairs is investigating the complaints about U.S. Energy's promotion and sales tactics, a spokeswoman said.