For years, Chuck Koshgarian has used Santanna Energy Services to supply gas to his business, Koshgarian Rug Cleaners Inc., and he’s never had a complaint.
His monthly bills are lower than the ones he used to receive from Nicor, he said, and the customer service has been great.
So when he received a letter saying Santanna had partnered with Direct Energy to provide electricity, Koshgarian thought he’d give it a try.
A Direct Energy representative came by his Hinsdale office and looked at his recent ComEd bills. The representative told Koshgarian that for his three accounts — two small offices and a rug cleaning plant — switching to Direct Energy would save him at least $50 a month.
It wasn’t a huge amount, but in this economy, every penny counts.
So on Dec. 15, Koshgarian signed a one-year contract with Direct Energy.
When he received his first monthly bill, he quickly realized something was wrong.
His smallest account, which normally cost him about $50 a month, had shot up to $125. There were similar increases in his two other accounts.
Flummoxed, he called Direct Energy and asked a representative to explain the charges. Koshgarian said he was told that an $85.50 “capacity charge” had been added to each account. According to a Direct Energy brochure, the charges are associated with buying capacity from suppliers to ensure they will have enough energy for the market. .
Koshgarian was floored.
“It is not the savings I thought I was going to be receiving,” he said.
He called customer service again, and an agent pointed to a line in his contract that says he would be assessed a capacity charge. Koshgarian argued that while the contract did, in fact, include a line about the capacity charge, it did not mention that it would be $85.50 a month.
“At no time did the salesman say to me ‘your bill will have a savings of this much and then when we add in the capacity charges your final monthly bill is this,'” Koshgarian said. “No, he said ‘you will save this much on your electricity’ and that was it.”
After a few more calls, Koshgarian was told the capacity charges had been miscalculated, and his June bill included a series of credits and adjustments that essentially erased the capacity charges.
But he still couldn’t make heads or tails of his bills, or what he would be charged going forward. Koshgarian said he asked a Direct Energy representative to explain his bills, the adjustments that were made and what his capacity charges would be in the future.
He said he was promised a callback, but it didn’t come. He called again and asked if he could cancel his contract, and was told yes — for $1,134.70.
Upset, he emailed What’s Your Problem?
Koshgarian said he simply wanted the billing process explained to him so he could understand what he would be charged in the future, and he wanted his monthly bills to decrease.
“The reason I went with them is because I wanted to save money, not because I wanted to pay more,” he said.
The Problem Solver called Bethany Ruhe, a spokeswoman for Direct Energy in Pittsburgh. A short time later, a Direct Energy representative called Koshgarian and told him the capacity charge would be waived for the remainder of his contract, leaving him with just a charge for actual electricity usage, which should save him money.
“Part of this issue was the capacity charge was billed incorrectly from the utility, and that unfortunately was passed through to the customer,” Ruhe said. “That problem was identified and corrected, and the charges were credited to Mr. Koshgarian prior to his contacting you.”
Ruhe said Koshgarian was on a good plan before, but not the best one for his business.
“After speaking with him, we moved him onto a more suitable product,” she said. “We are committed to serving our customers and responding to their questions and concerns in a timely manner. We take customer feedback to heart and are using this as a learning experience.”
Koshgarian said that with the changes to his account, he no longer wants to cancel the contract.
“From what I can extrapolate from my bills, without the capacity charges, it is less,” he said. “It was kind of a drawn-out explanation on their part, which was more of an excuse than anything else. But in the long run it has been taken care of.”
Koshgarian said he hasn’t yet decided what he’ll do when his contract expires in December.
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