Talk about a mistake.
When natural gas marketer Direct Energy accidentally sent 17,000 letters to the wrong people, it caused confusion, frustration and irritation.
The company admitted the mistake on Wednesday.
Direct Energy was supposed to send 3,400 letters about an aggregation, or group-buying deal, to residents in Summit County townships and the city of New Franklin. Instead, the letters went to people in Akron, Norton, Barberton and other cities.
Direct Energy spokeswoman Bethany Ruhe apologized and said the mistake would never happen again. She said consumers who got the letters in error would not get included in the aggregation and would not need to take any action.
Retraction letters are being sent out to the 17,000 and the correct letters were sent to the 3,400 with a new opt-out deadline of Feb. 28 instead of Jan. 30.
But all of this was aggravating to me and lots of customers.
Whether it can be seen as a pro or con of my job, I pretty much know when any natural gas marketer sends out any mass mailing offer. Thatís because phone calls and emails start coming in with questions. So, I knew the letters had started arriving in mailboxes more than a week ago.
At first, I thought the inquiries were from people who perhaps had missed my Beacon Journal column along with a news story at the end of November and December outlining the Summit County/Direct Energy aggregation deal priced at $5.39/ per thousand cubic feet (mcf) for two years and starting in February.
As a reminder, I said people should not take that deal and should follow the ďopt-outĒ choice once they got the letters.
I am still very happy with my choice of what is called the Standard Choice Offer (SCO). Thatís the monthly variable rate based on a state-approved formula and provided by a randomly selected, but approved company assigned by the Dominion East Ohio gas company.
That rate has performed extremely well. Since September, when the rate was $4.86/mcf, itís now down to a low of $4.08/mcf for the month of January. The price changes each month around the 11th of a month and you get the rate on the date your meter is read.
The SCO is based on the New York Mercantile Exchange (NYMEX) settlement price on the third to last business day of the previous month plus what is called a $1 adder charge, as approved by a Public Utilities Commission of Ohio yearly auction.
The next auction will be Feb. 28. The new adder will go into effect with April bills.
Thatís also when Dominion will reassign SCO customers behind the scenes to the providers, so you could notice a different name on your bill in April, but you donít have to do anything.
Last yearís adder went down from the previous year, so Iím hopeful the price will be just as competitive this year or perhaps even lower. But even if itís not, consumers know that wholesale markets for natural gas continue to be low. One day last week, the Wall Street Journal reported natural gas prices fell to a 10-year low.
So the SCO should continue to remain low. Fixed prices by marketers are based on competition and the wholesale prices. Consumers have already seen that the fixed prices this year have not come down to be competitive to the monthly SCO.
Calls, emails grow
The calls and email questions about the letters started growing over the weekend and by Tuesday, I was sensing something was wrong. I was getting messages from people saying the phone number to opt-out, 866-760-6040, was going directly to voice mail or the mailbox was full.
Other people said the company was telling them the representative couldnít confirm their account and couldnít confirm that they would be opted out of the aggregation. They were told they would have to call back in February to confirm, but if they got included, they could deal with it then.
I knew that wasnít acceptable. I then started finding out that people living in Akron or other suburbs but not townships were getting the letters.
Summit County officials were also pressing the company for answers. By Wednesday afternoon, Direct Energy confirmed the mistake.
While the county did contract with Direct Energy for the aggregation rate, it was Direct Energyís responsibility to send the letters to the correct people.
Whether you agree with the rate is a separate issue from the letter problem. Whether they are good deals depends on the prices at the time the aggregation groupís contract expires and the negotiations on a new price.
In some years, the rates can be better than the public rates. In my yearly comparisons, sometimes Iíve told people they should go with the aggregation. Often, however, the price isnít as competitive as what you can get on your own and this year in particular, nothing is beating the SCO prices.
Communities are allowed to form the aggregations based on ballot issues from the early 2000s, which created the buying groups.
Some aggregation offers are set up where you can opt-in. But most are set up as an opt-out, which means customers who have not chosen a provider on their own are automatically included in the group unless they call to opt-out or send in the opt-out form. The reason they are set up as an opt-out is because it creates a larger pool for pricing.
Itís a danger if you accidentally mistake an aggregation letter for junk mail and Iíve reminded people to keep an eye on all mail.
If you live in a Summit County township or New Franklin and you get a letter and you donít want to be included in the group, make sure you mail in the form or call the opt-out number.
Letís hope the second round of letters will be right and itís the end of this debacle.
Betty Lin-Fisher can be reached at 330-996-3724 or email@example.com. Follow her on Twitter at www.twitter.com/blinfisher and see all her stories at www.ohio.com/betty.