Class Action Suit Filed Against Energy Plus Over Alleged Pricing

A class action suit was filed against Energy Plus Holdings LLC and Energy Plus Natural Gas LP today by Sanford Wittels & Heisler LLP, alleging the marketing and pricing of Energy Plus' variable rate products violates the New Jersey Consumer Fraud Act and breaches the covenant of good faith and fair dealing.

Responding to the suit, a representative from Energy Plus said, "we don't believe the suit has any basis."

The suit filed in the United States District Court for the District of New Jersey alleges that Energy Plus, "promise[s] customers competitive market-based rates and savings on their energy bills if they switch from their local utilities or other energy suppliers to Energy Plus."

The suit further alleges Energy Plus, "represents that its rates will be tied to market factors and will be competitive with the market."

However, the suit alleges that, "Energy Plus' representations only hold for the first month of service."

"Defendants' actual rates were excessive and unreasonable and bore no reasonable relationship to market conditions," the suit alleges.

The suit specifically alleges that for a customer included in the class action, the Energy Plus electric rate for the customer, in the PSE&G territory, was 10.2724 cents per kWh for the initial month (November 2011), but then increased to about 15.9 cents per kWh for the months of December 211 through April 2012.

During this period, the suit alleges that the PSE&G rate ranged from about 11.3 cents per kWh to 12.3 cents per kWh.

The suit seeks relief under the New Jersey Consumer Fraud Act.

The suit also argues that,"[w]hen a contract contains an indefinite price term – such, as here, Defendants’ variable 'market-based' pricing – the seller does not have unfettered discretion to set the price. Rather, under the covenant of good faith and fair dealing, the seller must set the price reasonably and in good faith."