AARP Cautions: "Buyer Beware" When Purchasing Gas and/or Electric Service in New York's Deregulated Energy Marketplace

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Sep 19, 2012, 03:00 ET

Statement by Marilyn Pinsky, AARP New York State President

ALBANY, N.Y., Sept. 19, 2012 /PRNewswire-USNewswire/ -- New Yorkers are paying some of the highest electricity prices in the nation, with the costs making up a considerable and ever-increasing portion of household budgets. In particular, older consumers are vulnerable to increases in energy prices. Although they consume approximately the same amount of energy their younger counterparts do, older adults spend a higher percentage of their income on residential energy costs.

AARP is very concerned about recent media reports of data showing New York residential customers who bought energy from energy service companies (ESCOs) paid $413 more for electricity and $235 more for natural gas over the past two years, on average, compared with what they would have paid National Grid. ESCOs are alternative suppliers of natural gas and electricity that consumers contract with, oftentimes with the promise of lower prices.

On behalf of our 2.7 million members in New York, we sincerely hope this is not a widespread occurrence affecting customers of electric and gas service in other parts of the state. AARP is recommending New Yorkers be extremely cautious when switching to an ESCO for their gas and/or electric service. Consumers should always take care to compare rate plans. However, until the New York Public Service Commission (PSC) has had a chance to examine this apparent price discrepancy in the marketplace, consumers should exercise extra diligence when evaluating gas and electric rate plans.

Furthermore, we believe the PSC should, at a minimum, provide more effective tools to allow consumers to make price comparisons between ESCOs and their local utility company so they can gauge how much money they may or may not save if they switch service providers. In addition, we suggest re-examining their "Power to Choose" website and instituting a bill calculator that allows for price comparisons.

According to a recent AARP survey of New Yorkers 50+, over 40% said they found it "difficult" to pay their utility bill, with 18% finding it "very difficult."

Across the nation and in New York, AARP has a long history of advocating for residential ratepayers, including supporting laws that provide consumer protection to ESCO customers and more recently, supporting the ESCO Bill of Rights law in New York. AARP strongly believes that consumer options and competition will make for a stronger and more transparent ESCO marketplace in New York, but consumers must be empowered with information so that they can make informed choices for themselves and their households.

AARP has over 2.7 million members in New York.

AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

SOURCE AARP New York