COLUMBUS, Ohio (WCMH) — An Ohio family is sweating from the pressure of an $800 electric bill from July.
When they found out the rising cost wasn’t the result of cranking up the air conditioning, they called NBC4 Investigates to shine some light on why the price caught them by surprise.
James Mathias is one of several people who reached out in recent weeks to ask why their electric bill is suddenly so high. A disabled veteran, Mathias lives in Logan with his mother, Barbara Friesner. Mathias paid off the mortgage on her three-bedroom home, so she typically takes care of the utilities.
Friesner was astonished when her electric bill for the month of July was $798.79, a dramatic increase from the $290.44 she paid in April, which the mother and son considered typical for their home.
“We’ve had new windows put in. New roof. I’ve done a lot of work. I spent a month trying to figure out why our utility bill was so high. Trying to figure out what to do around here to fix it,” Mathias said. “I called AEP and they went over the bill with me. And when they found out that our kilowatt hours were 30 cents a kilowatt hour, that we were being robbed by this utility carrier.”
AEP’s “price to compare” rate is 7.2 cents per kilowatt hour. This number is regulated by the Public Utilities Commission of Ohio and can fluctuate quarterly based on the energy market.
As an energy distributor, AEP controls the infrastructure that brings power to your home.
“Imagine if we had different companies with competing sets if wires down the street. It doesn’t make much economic sense,” said Matt Shilling, PUCO’s Public Affairs Director. “That’s why distribution utilities are regulated. They have set service territories, but in exchange for that, their rates are regulated.”
However, pricing by energy suppliers, which control the energy commodities that AEP distributes, have not been regulated in Ohio for more than 20 years.
“On the supply side, that’s a competitive business, so we don’t have direct jurisdiction of the rates that they charge,” Schilling explained.
Since 2001, Ohio has allowed energy suppliers to compete for your business through the Energy Choice Ohio program. These companies might entice customers with a gift card, use of renewable energy sources, or an offer to lock in a rate for a fixed period of time.
“Well they guaranteed it was less than what I was paying, but he didn’t tell me it’s for a year or anything,” Friesner recalled. “Then they promised to send—give me a free month’s electric by sending my bill back after so long, but I never did that.”
Friesner’s billing statements show that between April and July, the supplier went from charging them 13 cents per kilowatt hour to 29.9 cents.
“It’s theft,” Mathias said.
Friesner paid July’s bill, leaving her with $478 from her Social Security check for the month, she said.
Mathias said he and his mother will stay afloat, financially. They have savings and his disabled veteran benefits to cover their expenses.
“I think about other people,” Friesner said. “We’re blessed. Jim’s here to help me. If he wasn’t here, I don’t know if I’d be able to keep my house.”
As long as the supplier discloses its pricing practices up front, they can essentially charge what they’d like, Schilling said.
“Since the retail rates of energy supply were deregulated in 2001, the PUCO no longer has any jurisdiction over the rates they charge. But the main focus for the regulator here in this competitive space is full disclosure,” Schilling said. “So all the terms and conditions must be disclosed ahead of time and in full to the consumers.”
Friesner said she is unable to find the contract with her energy supplier. NBC4 Investigates’ Jamie Ostroff called the supplier and was connected to a salesperson at a call center. After identifying herself as a journalist, she asked the salesperson about pricing.
He explained that new customers can secure a fixed rate for their first six months, after signing up over the phone in what he called a “verbal contract.” He said the customer then receives a “welcome kit” in the mail, containing full disclosures about variable pricing after the initial six months.
The salesperson said rates fluctuate along with the energy market. AEP’s price to compare rate increased roughly 40%, from 5.1 cents to 7.2 cents per kilowatt hour, over the past year. The rate Friesner was charged by her supplier more than doubled.
According to Mathias, the supplier offered to lower their rate to 10 cents per kilowatt hour for a year. He chose to allow AEP to arrange a new supplier for them, so they could get a lower rate. Schilling said this is a good approach to lowering your electric bill.
“The Public Utilities Commission oversees wholesale auctions, in which wholesale suppliers bid for the right to sell electricity to those consumers who don’t shop on their own,” Schilling said. “The idea there is that that auction is going to attract the lowest possible prices given the state of the energy market.”
Schilling also recommended customers call the PUCO at 1-800-686-PUCO if they feel they’re being deceived or taken advantage of by their power supplier.
“Our customer call center is one of our best windows into the real world, what these contracts are. Because it’s a deregulated space, we don’t have a perfect lens into what all the contracts that customers are agreeing to with suppliers,” Schilling said.
The commission has taken action against an energy supplier in the past. Records show that in 2019, more than 50 people called the customer complaint line to voice issues with this particular supplier. The PUCO investigated and found that the company was charging “unconscionable” rates. That company is no longer allowed to do business in Ohio.
According to the PUCO’s records, the company that was charging Friesner nearly 30 cents per kilowatt hour was the subject of 226 calls to the customer call center in 2022. Schilling was unable to identify the exact nature of those calls.
To make sure you’re not being taken advantage of by an energy supplier, the PUCO suggests asking these questions before signing up:
- Are you a PUCO-certified supplier?
- What is the price per kilowatt hour (kWh) – electric, or price per hundred cubic feet (ccf) or thousand cubic feet (mcf) – natural gas?
- Is the price fixed or does it change?
- If it changes, how does it change?
- Does the price depend on how much I use or when I use electricity or natural gas?
- Will there be a switching fee?
- Is there a fee if I cancel the contract early?
- Is there a customer incentive for signing up?
- Are there any special add-on services?
- How long will the rate remain in effect?
- What happens when my contract expires?
- Will I receive one or two bills a month?
- Who provides the billing?
- Is there a budget plan?
- Are current budget plan customers eligible?
- Are there any built-in price increases or decreases?
More information is available at energychoice.ohio.gov.