Battling a third party energy company

Nina Pineda has the 7 on your side story.
Seven On Your Side
March 7, 2014 3:08:28 PM PST
This harsh winter forcing many of us to pay a higher than usual energy bills.

But some people were shocked when their bills skyrocketed when they were charged extra by a third party energy company.

"It was astounding it was $748.11 for one month!" Joanna Zmuda said.

"Which brings her bill to $702.69," Jose Martinez said.

The jolt on last month's power bill came as a double shock to two separate families.

"There's something going on here that's just not right!" Martinez said.

"I'm confident they forged the signature," Zmuda said.

Both Jose Martinez and Joanna Zmuda say their mothers got slammed, signed up without their knowledge, to buy their electric and gas, not from the public utility, but from a third party energy company named PALMco.

"Somebody called her and they said we can save you some money on electricity , it's all done through PSE&G, she heard that so, it sounds like I'm saving money," Martinez said.

But the reality became evident in this winter's whoppers.

Jose Martinez lives in the same house as his mother in side by side units, in January his PSE&G bill was just $210. Hers with PALMco was doubled at $443.

But February was the final straw. His was $276 and hers was nearly tripled at $702.

"Mind you my thermostat is at 68 degrees hers is at 63," Martinez said.

Joanna Zmuda says her bill blew up after her mom Anna's encounter with a PALMco door-to-door salesperson.

"She says she works for PSE&G and she wanted to see the bill because PSE&G charge over, the bill is too high," Anna said.

"That's not her handwriting, that's not her signature," Zmuda said.

You can see the difference between Anna's actual signature and how it looks on the PALMco contract.

"We call that slamming. If someone got slammed and signed up without their permission then the board really could take action," said Stefanie Brand, of the Rate Board Counsel.

In New Jersey, complaints about big bills from third party energy providers like PALMco have been on the rise.

Stefanie says the problem is these power company offer variable and sometimes volatile rates.

"Sometimes you save. Sometimes you don't. So there nothing illegal about it if they really did sign the contract," Brand said.

PALMco, also known as Columbia Utilities, denies slamming any customers and says extremely cold winters drove up demand and prices.

But after 7 On Your Side pointed out these two customers, they got some money back.

"Thank you, thank you, very much on behalf of my mom and son," Martinez said.

Jose got back nearly $500 so far.

"As soon as they got contacted from 7 On Your Side they started singing a different tune!" Martinez said.

The Zmuda's got refunded more than $1,800. "Thank you 7 On Your Side," Anna said.

PALMco is refunding Ms. Martinez's higher rates for the first three months of this year.

The Zmuda's got the difference in higher rates refunded for as long as they've had PALMco service.

Both families have since canceled PALMco's service.

The big takeaway is don't sign up for anything over the phone. Make sure you get the deal in writing and review any contract before you sign. And ask about the gas and electric rates; are they fixed or variable? And does the utility have any cancelation fees? Check your utility bill closely and keep copies.

We also asked PALMco when the last month when their rates beat PSE&G was, and their rep couldn't or wouldn't answer.

Statement from PALMco:
"Our family has been in the energy business for over 75 years, and we value quality service and train our customer service specialists to make every effort to address our customers' needs. Additionally, we have checks in place to ensure that our staff and third-party marketers who handle sales meet our high standards. We serve tens of thousands of customers and less than 0.21% have expressed concerns in the last two months. Nonetheless, any and all concerns are addressed immediately, and the salesmen in question are no longer affiliated with our company.

"Unfortunately, extremely cold winters like this one can drive up demand and produce spikes in market prices. While market rates are beyond our control, we always aim to keep our customers' costs as low as we can. In fact, the rates reflected on some of our customers' recent bills were actually below our cost because we understand that the sudden surge in prices may be a financial challenge for some. We continue to put our customers' needs first and provide them with the quality service they deserve."