ConsumerWatch: New Bay Area Energy Firm Draws Complaints

SAN FRANCISCO (KPIX 5) — Deregulation of the energy industry allows California consumers a chance to shop around for gas and electricity providers. But consumers should watch out for pressure tactics to switch.

Karla Gallardo said she was duped, by a salesman who recently came knocking at her door. “They wanted to know if we qualified for one of the PG&E discount programs,” she told KPIX 5.

After looking at her PG&E bill, the salesman told her, “Yeah, you qualify. You’re going to save a lot of money.”

Gallardo signed up. Only later did she realize, “They actually aren’t associated with PG&E at all.”

It turns out Gallardo had unknowingly signed up with a completely different company, an alternate energy supplier called Commerce Energy.

“Basically what they are doing is buying gas for their customers, getting it to us, and we safely deliver it,” explained Joe Molica with Pacific Gas & Electric Co.

But Molica said unlike PG&E, the alternate suppliers are not regulated in California. “We do see a lot of these customer complaints. And it’s frustrating for us,” he said.

Commerce Energy is new to the Bay Area. But its parent company, Canadian based Just Energy, does not have a great track record.

There have been tens of thousands of complaints from across the U.S., from consumers saying they were misled into signing up. And instead of saving money, their bills went up.

The complaints led to a consumer fraud lawsuit by the state of Illinois, and investigations in New York, Ohio and Canada. Just Energy settled all of them by paying large fines, and promising to change its sales practices.

But a former employee told KPIX 5, here in the Bay Area that’s not happening. “The sales practices were completely unethical,” said Ernest White, who briefly worked for Commerce Energy’s local office. “From the get go they try to give the impression that they are with PG&E. And if you question it, that they are a supplier, the sole supplier of PG&E.”

White said his manager taught him tricks to get his foot in the door. “One was that this was a petition to lower prices, the other one was that this was something that Obama personally was backing,” he said.

And he said the pressure was intense, with quotas to fill, even incentives like free trips to Hawaii.

After numerous calls to Commerce Energy led nowhere, KPIX 5 paid a visit the company’s local office, hoping to get answers to the allegations. “When your employees go out do they first ask for a PG&E bill? Do they imply that they are with PG&E?” we asked.

A woman who appeared to be a supervisor told KPIX 5 she doesn’t do the field training. We asked if she was aware of all the complaints and the lawsuits filed in at least three different states. She told us all companies have issues. But before she could say more, a second manager called security, and we were asked to leave.

Later, Just Energy sent a statement to KPIX 5, saying “we take the issues you present very seriously and are anxious to identify the independent contractor involved.”

The company also sent a picture of a button they said sales people are also supposed to wear that says “we’re not the utility.”

But Ernest White said he never got one. And Karla Gallardo said her salesman didn’t have one either.

Gallardo was able to cancel her contract, but wants to warn others to be cautious next time you get a knock on your door.

Just Energy said it has made changes in its sales practices, mostly done through independent door to door marketers. As a result the company says complaints are way down.

Just Energy statement:

We take the issues you present very seriously and are anxious to identify and locate the independent contractor (IC) involved. All of our sales agents are required at the door to identify themselves as a representative of Just Energy (or a JE company, such as Commerce Energy), ensure their ID badge is clearly displayed, provide the homeowner with a branded business card/contact sheet, disclose the purpose of their visit, and that they are not affiliated with any local utility, the government or any consumer group. As an added measure to avoid confusion, our sales reps are required to wear a “We’re Not the Utility” button. The attached images reflect these requirements.

To further ensure customer protection, every enrollment is phone-verified through an independent third party. The call is to confirm directly with the customer if the IC clearly stated that they are a representative of Just Energy (or affiliate company) and clearly stated that he/she is not associated with the local utility. When we learn that an IC has breached our marketing standards, we will follow through – as we will in this case – with a thorough investigation and take any necessary corrective actions, including termination.

We recognize also that there will be instances where former salespeople may speak negatively about the company, however we take great pride in our training process, which is carefully designed to help all of our representatives abide by the highest standard in sales practices. Every one of our orientation classes include clear expectations with regards to professional conduct, company and regulatory requirements.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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