Connecticut Attorney General's Office
Press Release
Attorney General Announces Settlement Worth $2.1 Million With Stamford Electricity Supplier
June 23, 2009
The settlement includes $1.76 million in credits and refunds that MXenergy Electricity, Inc. provided last summer at the insistence of Blumenthal and Consumer Counsel Mary J. Healey. Under the agreement with Blumenthal and Healey announced today, the company will pay almost 3,000 consumers an additional $367,097 in refunds.
In 2008, MXenergy offered consumers low, temporary teaser rates, but failed to give them sufficient opportunity or notice to cancel before charging much higher prices. The low teaser rates expired last summer just as oil prices peaked, temporarily pushing power rates to record levels and locking about 9,000 customers into hugely overpriced contracts.
Blumenthal began investigating in late August, ultimately leading the company to abandon its overpriced contracts, returning consumers to low teaser rates and providing some refunds and other credits.
Blumenthal said, "For many consumers -- who are now fully refunded -- the practical result was a bait and switch with low teaser rates. We're reimbursing ratepayers for outrageous power rates caused by MXenergy's incompetence -- or worse. MXenergy lured customers with lower teaser rates, only to soon stick them with stratospheric prices -- effectively a bait and switch. MXenergy's initial reaction was unacceptable inaction -- until we turned up the light. The $2.1 million recovery includes $675,623 in cash refunds and $1.5 million in credits or lowered bills.
"This case once again shows the immediate need for comprehensive reform of Connecticut's electricity market, starting with a public energy authority to eliminate middlemen and manipulators, and reduce prices. A public authority would give consumers lower cost, reliable electricity, protecting them from fly-by-night bunglers and crooks.
"We're stopping MXenergy's stupendously costly contracts and providing rate relief and refunds."