Free Market Energy == SCAM

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Tim
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Re: Free Market Energy == SCAM

Post by Tim »

Joe Shlabotnik wrote:
Tim wrote:
Joe Shlabotnik wrote:You want to know why I have a problem with Libertarianism and GOP market driven solutions?

I am up here in NY helping put my mother's finances in order. She gets her utilities via Rochester Gas and Electric. Except that her electricity is bought through a company called Family Energy and she just got a renewal notice from them for a year at 7.79 cents kw/H. Called up RG&E to ask whats this all about, I thought you were the electricity and gas company?

The guy says its an 'open' market in NY and you can choose from 80-some companies. WTF? How much is RG&E's? 4 cents a kw/H.

Son of a [expletive]. I ask the guy at RG&E when that happened? He says he doesn't know but she was probably offered a deal from someone going door to door. I ask my mom - she has no idea and doesn't remember signing up for electricity from anyone.

Its complete [expletive] to let the predators in to something like the local utility. It ends up coming via RG&E anyway.

JUst like what the market is doing to health care, student loans, and what it did to mortgages 10 years ago.

Everything is a [expletive] scam. Libertarianism is just another word for people getting screwed by those with no conscience and no morals.

[expletive] that.
I am confused (not a surprise). So, does your mother get the chance to switch to the cheaper provider? I am honestly asking. We don't have this option in SC.
Yes, she has a choice every two years apparently. And we took advantage of it to go back to the utility itself.
I promise I'm not being obtuse, but what's the issue? Seems like more choices would be a good thing.

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Tim
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Re: Free Market Energy == SCAM

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I think I'm just not understanding this since I'm SC we don't get a choice. I guess the issue was that she was auto-enrolled in the higher priced provider? I must say that does seem criminal.

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Joe Shlabotnik
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Re: Free Market Energy == SCAM

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If all of your choices are providers adding nothing of real value, what's the choice? It the electric utility. The gas and electric are being delivered the same way. The rates charged by the utility are set by a commission reacting to market forces.
The other provider in this case is saying they provide a fixed price over the commission based pricing. But double the price is no value.
The 'choice' is between middlemen trying to make a buck on the customers ignorance. A come on rate for a few months while locking you in to a higher rate. What the hell is the point of an extra middleman adding no real value? The point is to exploit customers ignorance. That is [expletive].

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Tim
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Re: Free Market Energy == SCAM

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Joe Shlabotnik wrote:If all of your choices are providers adding nothing of real value, what's the choice? It the electric utility. The gas and electric are being delivered the same way. The rates charged by the utility are set by a commission reacting to market forces.
The other provider in this case is saying they provide a fixed price over the commission based pricing. But double the price is no value.
The 'choice' is between middlemen trying to make a buck on the customers ignorance. A come on rate for a few months while locking you in to a higher rate. What the hell is the point of an extra middleman adding no real value? The point is to exploit customers ignorance. That is [expletive].
Then I would argue this isn't a free market.

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Tim
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Re: Free Market Energy == SCAM

Post by Tim »

Libertarians are opposed to price fixing.

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Re: Free Market Energy == SCAM

Post by Joe Shlabotnik »

Tim wrote:Libertarians are opposed to price fixing.
Well we'll just disagree. This isn't price-fixing setting a price based on Market factors. It doesn't make sense to me to have competitors trying to deliver a piece of infrastructure.
In the case of an electric utility there is one set of wires delivering electricity from $0.01 of electric generating facilities. It doesn't make sense to me to have middlemen to deliver the electricity being generated by this small set of plants. Why introduce middlemen into this process? It only allows predators to prey on those who they can take advantage of.

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Tim
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Re: Free Market Energy == SCAM

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I think your anger is misguided. I don't think this service is an example of a free market. Anytime a "commission" is setting a price based on "market factors" that isn't a free market.

I'm far from an economist so it's entirely possible I'm mistaken.

I do know that libertarians are opposed to price fixing

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Swirls
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Re: Free Market Energy == SCAM

Post by Swirls »

http://www.energypluscompany.com/care/faqs.php

That FAQ answers most of your questions, I think.

The "scam" part comes in a few months after you switch utilities for the supply portion of your bill. For variable rate plans, you usually have a few months of cheap rates followed by very expensive rates. For fixed rate plans, you usually have a year of rates around what you were paying before, followed by very expensive rates.

I've never read a single report or spoken with anyone who has actually benefited long-term from switching utility providers for the supply portion of their electric and/or gas bill. You do usually save in the first couple months but then your ensuing rate spike more than compensates for what little you saved. And after that point you're taking a loss every month compared to if you had just stayed with your original primary utility for both the supply and delivery portion of your energy bill.

I suppose that, theoretically, there is a benefit to these other supply companies in deregulated states. if your primary utility chooses to jack up your rates you could switch and then potentially save some money. In regulated states, you don't have an option. If the utility company jacks up your rates, you gotta pay it no matter what. However, regulated states have a public services commission who is the party responsible for reviewing rate cases filed by utilities. It's up to the utility to properly justify to the regulator as to WHY they need to raise their rates. Regulators deny rate cases all the time if they don't believe the utility has sufficiently justified their case.

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Tim
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Re: Free Market Energy == SCAM

Post by Tim »

Swirls wrote:http://www.energypluscompany.com/care/faqs.php

That FAQ answers most of your questions, I think.

The "scam" part comes in a few months after you switch utilities for the supply portion of your bill. For variable rate plans, you usually have a few months of cheap rates followed by very expensive rates. For fixed rate plans, you usually have a year of rates around what you were paying before, followed by very expensive rates.

I've never read a single report or spoken with anyone who has actually benefited long-term from switching utility providers for the supply portion of their electric and/or gas bill. You do usually save in the first couple months but then your ensuing rate spike more than compensates for what little you saved. And after that point you're taking a loss every month compared to if you had just stayed with your original primary utility for both the supply and delivery portion of your energy bill.

I suppose that, theoretically, there is a benefit to these other supply companies in deregulated states. if your primary utility chooses to jack up your rates you could switch and then potentially save some money. In regulated states, you don't have an option. If the utility company jacks up your rates, you gotta pay it no matter what. However, regulated states have a public services commission who is the party responsible for reviewing rate cases filed by utilities. It's up to the utility to properly justify to the regulator as to WHY they need to raise their rates. Regulators deny rate cases all the time if they don't believe the utility has sufficiently justified their case.
Thanks. Interesting.

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Swirls
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Re: Free Market Energy == SCAM

Post by Swirls »

Oddly enough, we just got an email at work regarding our rate case that is in review right now. The Minnesota Public Utilities commission is hosting a public hearing tonight to discuss it at the local community college. Wide open to the general public for anyone who isn't happy with their current rates to voice their opinion to the regulator.

http://www.trumba.com/calendars/mn-puc? ... ildview%3D

Every regulated state will have a public services commission that ensures your local utility company can't jack up your bill on a whim. It usually takes at least six months for a rate case to be reviewed and a final decision be made. Most utility companies submit them every year - I think ours that we just did is actually a special rate case in that it would cover 2017 and 2018 rate prices.

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