Pennsylvania?s electricity market hit a bump in the road last month when some alternative suppliers failed to comply with the Pennsylvania Public Utility Commission?s standards on billing.  In a May 27th letter, the Commission recounted recent problems with suppliers failing to list current rates on billing statements and confusion over the state?s sales taxes.

Respond Power L.L.C. of Brooklyn, failed to disclose its rates to customers for several months. The absence of a rate statement was especially troublesome for customers with variable rates that change from month to month.  Respond?s variable residential rate rose from 8.49 cents per kwh in January to 9.69 cents per kwh in May.  The company blamed the error on a third-party contractor used for billing services, they have since moved all billing operations in-house.

In another billing oversight, Gateway Energy Services Corp. of Montebello New York, mistakenly charged 5,770 residential customers for state sales tax.  In Pennsylvania, the utility bills of primary residences are exempt from sales tax?vacation homes, commercial and industrial utility bills are not exempt from sales tax.

One of affected customers called the PUC?s Bureau of Consumer Services to complain. The unnamed PUC employee did not realize that residential bills were sales tax exempt and told the consumer there was nothing the PUC could do. But the customer was persistent and brought the problem to the attention of a local newspaper, the Philadelphia Inquirer. The Inquirer brought in the state consumer advocate who contacted Gateway. The company quickly acknowledged the error.

Gateway promised to correct the bill and process a refund for all affected customers regardless of whether they contact the energy supplier. The company said as many as 5,000 Gateway customers who signed up between November 2010 and February 2011 may be affected by the overcharge. The error was blamed on a software glitch that misidentified some residential customers as commercial.

Both billing mistakes involved consumers in the southeast portion of Pennsylvania, around Philadelphia. This is not surprising since alternative providers under the PA Electric Choice program have been serving customers in that area for less than a year.  Rate caps in region expired on December 31 2010, ushering in a period of true market competition.

As for the PUC, it promptly contacted both companies and directed them to immediately bring their billing procedures into compliance and remedy any billing errors by June 10^th, roughly a month after errors were discovered. Still, there is wide-spread concern that even small isolated events could shake customer confidence, especially when many Pennsylvanians are still unfamiliar or wary of shopping for electricity.

The moral of the story is that customers need to read their bills each month. While the bill will still have the distributor?s logo and address, such as PECO or PPL, the billing information related to generation comes directly from the alternative supplier. The distributor is not responsible for any errors in that information. Consumers should contact their supplier if they have questions about generation charges or suspect errors on their bill.