Dispute, withhold payment on high electric bills

He is a successful businessman.

He is a former politician, and well-connected.

But Rick Rovegno has fallen into the same predicament as hundreds of less-plugged-in Pennsylvanians who had variable rate electric contracts during last month's energy spike.

The former Cumberland County Commissioner owns two huge buildings – a condominium complex in Mechanicsburg and an office complex in Carlisle – and he's gotten even huger electric bills.

“We have a lot of different meters, but the single biggest bill was $7,000 and it was normally in the range of $1,500,” Rovegno said.

Rovegno's supplier was Direct Energy. He says he's not paying, for now, because he can't. Last month's electric bill dwarfs all the rest of his expenses combined.

“If I pay the electrical bill that they're asking, I couldn't pay the mortgage payment, the taxes, the insurance, the maintenance and upkeep on the complexes,” he said. “Besides being angry, there simply isn't enough money.”

Rovegno will file an official complaint with the Public Utility Commission and withhold payment until the dispute is resolved.

A PUC spokeswoman says that's what he, and you, should do. The PUC also strongly recommends contacting the supplier and try to talk them into lowering the bill. It has worked in some instances.

“There are suppliers that are offering refunds and rolling back rates for customers,” said PUC Chairman Robert Powelson at Thursday's public meeting. “They're the kind of suppliers we want in this marketplace because they're committed to maintaining good customer relations.”

But business is business, money is money, and not every company will be so forgiving.

The bottom line: buyer beware when it comes to variable rates.

The PUC announced it's looking to make sure companies didn't mislead consumers or violate contracts, but if the terms were spelled out in the contract – even the fine print on the back page – and a customer agreed to a variable rate, they're likely on the hook for the money.

Rovegno doubts his supplier really paid five times more for the electricity in January than it did in December. Unfortunately, no regulatory agency is ensuring that when a company charges you big dollars for electricity that it actually paid big dollars for that electricity.

The PUC is only now exploring whether it can legally put caps on dramatic increases, and whether it should.

“The PUC does not have jurisdiction over that piece of the business,” PUC Vice Chairman John Coleman said. “The supplier has the ability to purchase the supply in the competitive marketplace and pass those costs on to the consumer.”

Rovegno admits he's tempted to refuse payment in protest if his dispute is rejected, but experts warn that could cause his power to be shut off and his credit to be harmed.

“You can say, 'Are you worried about your credit rating?' I'm worried I won't have enough money in my bank account to pay the electrical bill,” Rovegno said only half joking. “So what does it matter?”


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