WYOMING, Mich. — (April 24, 2014) — David Jasperse expects to get some of his money back following a high heating bill, according to a letter from the Michigan Public Service Commission.
In October 2012, it was just another day on the job for the paint salesman when a natural gas salesman walked into his business to make him an offer he couldn’t refuse. “[It was] about the Michigan Gas Choice Program. I was aware of that from about 2 years earlier,” he said.
The Michigan Gas Choice Program allows alternative natural gas suppliers to sell the commodity on the free market. Energy companies like DTE and Consumers Energy are regulated and can’t raise rates without approval from the state.
Companies like Volunteer Energy can set their own rates and try to convince customers like Jasperse to sign up, and he was interested. “Obviously, it was the saving money. I felt natural gas prices were on their way down.”
He knew the risk, Jasperse says. In a free market, suppliers like Volunteer Energy can also raise the rates as much as they want.
Many people around West Michigan found out the hard way this past winter. The unit known as CCF is similar to the gallon you’d buy at the gas station.
In December 2013, the CCF rate was 53 cents. “But the January bill went up to $1.59,” Jasperse recalls.
But, being a businessman, Jasperse prepared for this from the day he signed the contract with the salesman. He made sure he kept a copy of the contract. That proved the difference when Jasperse saw his gas rates go up.
The second line of Jasperse’ contract states that Volunteer Energy has to notify him in writing 30 days before a rate increase. And line 5 says the customer has the right to terminate service with Volunteer with 30 days notice.
Jasperse called the Michigan Public Service Commission in Lansing. He also emailed this letter and a copy of his contract.
“If I don’t have a copy then I don’t sign a contract,” he said. “I have a copy machine here in the office, so I just made the copy. [The salesman] wasn’t real pleased with it at the time.”
If people think there’s been a breach of contract, citizens can call the Michigan Public Service Commission’s toll-free number, said MPSC spokesperson Judy Palnau.
Refunds are not guaranteed. “I think there’s been two or three where we’ve directed the company to make a refund,” Palnau explained, “but the hundreds of people who’ve called, the vast majority of them, there’s nothing we can do for them.”
Palnau said it’s unlikely that alternative gas suppliers spiked the prices just to get more profit, because natural gas prices during the winter were at a five-year high. Customers might not have signed up with an alternative gas company if they had known rates would rise, she said, but “nobody predicted just how long and harsh this winter would be.”
There are important questions you should ask when considering alternatives, Palnau said. “Is it a variable rate contract? How long is the contract? Is it one year, two years, maybe longer? So know that before you get into it.”
The MPSC determined that there was a breach of contract in Jasperse’s case.
Jasperse said he got a letter from the state “stating that Volunteer Energy was going to return some of the money that they had taken in the rate increase from January.”
“I would urge anyone that signs up: make sure you have a copy of the contract before that person leaves your home or office.”
FOX 17 will follow-up to make sure the company follows through and mails the refund.
Meanwhile, another company, Just Energy, has received an “F” rating by the Better Business Bureau. The company has been accused of deceptive business practices and has been fined or reached settlements worth more than $1 million.
If you plan to sign up for a contract with an alternative energy company,the BBB and public service commission have recommendations:
- Don’t be pressured to sign up on the spot. Take time to think it over.
- Research the company and any previous complaints
- Know and understand the terms of the contract
- Keep a copy of your contract