Deregulation of the Gas Industry


Customer perception regarding the industry is generally vague. They’ve heard of it but they do not know what it really means or how it benefits them.

Many consumers are unaware that they now have a choice between the major utilities and non-utility suppliers (ESCOs)

Consumers need more information regarding their choices
They need to be made aware the market is now competitive and may therefore offer lower prices than it would under government regulation
This competition also offers the production of new technologies and innovation that promote new services

They need to be educated about deregulation and its benefits. They need to know:

  • that they can now comparison shop for gas & electric
  • how the utility companies like Con Ed & LILCO are involved in the process
  • what they can do if they receive bills from non-utility suppliers with whom they are unfamiliar
  • where they could complain about such companies
  • how to choose a supplier
  • that there may be contractual agreements involved

The BBB generally hears from customers when they have billing problems Typically, they complain that they’ve been billed for service (gas or electricity) by a company (ESCO) that they’ve never heard of

Consumers need to understand the billing process. They should contact their utility company or ESCO for a detailed explanation
Complaints generally involve that they’ve been billed separately by their utility as well as another company
-or that they’ve been billed by the utility and another company on the same bill

They need to be educated about the “slamming” (fraudulent switching)
They must be made aware that non-utility suppliers may require them to sign a contractual agreement for the provision of service
They need to understand that they must check all terms of their contracts before signing
They must learn how to read their bills in order to understand what they’re paying for and who they’re paying for service
They should be able to spot billing mistakes and know who to complain to if they have a problem

Red Flags: 
Don’t be rushed into signing contracts or accepting telemarketing agreements
Incident: ESCOs may use telemarketing to solicit customers. In one instance, a telemarketer called a colleague of mine and proposed service saying that CON Ed was about to discontinue service in his area and that this may be his last chance to switch before this happens. He offered a rate of service and proposed that my friend could go with another ESCO but may have to pay a higher rate… so he’ll go ahead and switch now to avoid being left without service!

Beware of such telemarketers. This aggressive tactic is misleading and deceptive. Your utility company will notify you in writing of any disruption in service in advance. Do not be pressured into buying service.

Before Switching: 
Before signing a contract or agreeing to switch service:
Ask for everything in writing from the company
They must disclose their rates
Ask whether you’re being billed on a per-month or a level- billing plan
Ask that all charges be listed (per kilo watt usage)