Hiko could lose license for hiking electric rates

Case is first seeking revocation of electricity supplier's license over customer issues.

  • Pin It

There was no doubt in the minds of the thousands of PPL customers who signed up to buy electricity from competitive supplier Hiko Energy that they would save money. The only uncertainty was how much they'd save.

The promotion they enrolled under touted "guaranteed savings" by promising their rate for the first six months would be at least 1 percent less than PPL's rate, and as much as 7 percent less.

Instead, they paid more, much more in some cases, than they would have if they'd remained customers of PPL, according to state investigators who say Hiko Energy should lose its license to sell electricity in Pennsylvania because it hiked rates well beyond what it advertised.

An administrative complaint filed about a week ago by the investigative arm of the state Public Utility Commission says Hiko overcharged customers 14,780 times between January and April. More than half of those overcharges, 8,059, were in the PPL service area. Another 1,637 were in the Met-Ed area and 1,598 in the PECO area.


» The latest on traffic, delays and road construction delivered to your mobile phone. Click to sign up to receive text alerts!

This is the first time the PUC's independent Bureau of Investigation and Enforcement has sought to revoke an electricity supplier's license due to customer-related issues, PUC spokeswoman Robin Tilley said.

The bureau also proposes a fine of $14.78 million, or $1,000 for each instance that a customer was overcharged. And it wants Hiko to refund customers any money they paid in excess of their guaranteed discounted rate.

Hiko, based in Monsey, N.Y., did not return my call.

The complaint is the latest fallout from the high electric bills that plagued thousands of homeowners following last winter's unbearable cold snap when people cranked up the heat.

As power use rose, thousands of people buying electricity at variable rates from competitive suppliers like Hiko were caught off guard when their rates jumped without warning. Some rates doubled, tripled or quadrupled in just a month, breaking budgets with bills that were hundreds of dollars more than customers anticipated. The prices rose because wholesale energy prices rose with the demand.

Thousands of outraged homeowners sought help from consumer protection authorities including the attorney general's office, Office of Consumer Advocate and the PUC.

The PUC responded by tightening regulations to require power suppliers to disclose more information to customers, such as advance notice of some variable rate changes and whether there are limits on how much variable rates could change. Those changes took effect last week.

The agency also reduced the time it takes to switch suppliers to three days from the previous 11 to 40 days, so customers don't have to suffer a high rate for another billing cycle. That takes effect this year.

Some state lawmakers talked tough about capping how much variable rates could change or prohibiting variable rates altogether, but with the legislative session winding down, that appears to have just been more political grandstanding without the willpower to follow through.

As of early last month, 378 people had filed informal complaints against Hiko this year with the PUC. About 44 percent of those were billing/price issues and 35 percent were issues with customer service.

At least nine customers filed formal complaints, which means the cases were docketed for a possible review by an administrative law judge. All were resolved to the customer's satisfaction.

Records in one case show a Doylestown woman complained that her rate rose from 9.2 cents per kilowatt hour in November to 28.9 cents in January, meaning her bill rose from $404 to $1,991. She said she called Hiko four times and didn't get a response and was unable to leave a fifth message because the company's voice mail was full.

The recent complaint by the Bureau of Investigation and Enforcement says Hiko "admitted" through data it provided investigators that it billed customers a higher rate than they were told they'd pay during their six-month introductory period.

"According to Hiko, the winter season of 2013-2014 brought unprecedented costs related to what has been generally referred to as the 'polar vortex' and, as a result, there was a period of time when Hiko's rates did not reflect the offer guaranteed in its price offering," the complaint says.

Instead of getting a discount off PPL's default rate of 8.8 cents per kilowatt hour in February and March, some Hiko customers paid as much as 29.9 cents per kilowatt hour, the complaint says.

Hiko charged some Met-Ed and PECO customers a rate of 28.9 cents in February and March when the rate should have been below Met-Ed's rate of 8.2 cents and PECO's rate of 9.8 cents, the complaint says.

If Hiko responds to the complaint, the case will be assigned to an administrative law judge, whose decision will be sent to the five-member PUC board for final action. If Hiko doesn't respond, the bureau can ask the PUC to impose the requested penalties.

The board granted Hiko a license to sell power in Pennsylvania in 2012, but with concern because of the number of complaints filed against it in New York.

The Bureau of Investigation and Enforcement isn't the only agency calling for the PUC to take action against Hiko.

Last month, the state attorney general's office and Office of Consumer Advocate filed a joint administrative complaint asking the PUC to revoke or suspend Hiko's license. The complaint said customers "were misled and deceived as to the price they would pay for their electricity."

Hiko also was sued by New Jersey consumer protection and public utility authorities who alleged the company failed to deliver guaranteed monthly savings of up to 10 percent for the first six months on electric and gas bills. The case is pending.

Since the company isn't returning my calls, I'll have to wait for it to file its legal paperwork with the PUC to see what it has to say about these latest allegations. The filings are due by the end of the month.

It's not too late for you to file complaints if you believe you were overcharged during the polar vortex. You can reach the attorney general at 800-441-2555 or http://www.attorneygeneral.gov; consumer advocate at 800-684-6560 or http://www.oca.state.pa.us; and PUC at 800-692-7380 or http://www.puc.state.pa.us.

The Watchdog is published Thursdays and Sundays. Contact me at watchdog@mcall.com, 610-841-2364 or The Morning Call, 101 N. Sixth St., Allentown, PA, 18101. I'm on Twitter @mcwatchdog and Facebook at Morning Call Watchdog.

mc-hiko-energy-complaint-watchdog-20140719
  • Pin It
Are you or have you ever been the victim of a scam? Do you believe a business is acting unethically? The Watchdog wants to hear your story...
CONTACT: The Watchdog
News Coverage on Ted Hendricks - CTNow
RSS feeds allow Web site content to be gathered via feed reader software. Click the subscribe link to obtain the feed URL for this page. The feed will update when new content appears on this page.

Ted Hendricks

A collection of news and information related to Ted Hendricks published by this site and its partners.

Top Ted Hendricks Articles see all

Displaying items 0-0
No articles were found for this topic.