U.S. Sen. Schumer Asks FTC to Investigate Polar Vortex Pricing

U.S. Senator Charles Schumer today urged the Federal Trade Commission (FTC) to immediately investigate the "mind-boggling" increase in electric prices seen by Upstate New York customers during the winter.

"I am calling on the Federal Trade Commission -- the authority when it comes to consumer protection and anticompetitive business practices -- to launch an investigation into these exorbitant price hikes. We need to make sure that customers are not being overcharged, and we need to make sure this same situation does not happen again in the high-usage months of summer," Schumer said

Interestingly, Schumer did not specifically cite ESCOs in a press release or letter to the FTC. Nor did Schumer seem only concerned that wholesale electric prices were excessive.

Rather, Schumer asked the FTC to ensure that utilities, in their default service rates, are not using the recent wholesale market pricing to increase supply rates in excess of the costs that the utilities actually experienced.

"Utilities throughout the state have attributed the increase to record-low temperatures and high demand for natural gas, but Schumer said that the size of the rate increases were so high that he is concerned it outpaced the actual increase in wholesale energy costs for utilities," a press release from Schumer's office said.

"Therefore, he is asking the FTC, in conjunction with the Federal Energy Regulatory Commission (FERC) and the Department of Justice (DOJ), should it become necessary, to investigate the entire wholesale electric and natural gas markets to ensure that these markets were on the level, and that customers were not being improperly overcharged. Schumer explained that there are multiple ways utilities or natural gas providers could artificially inflate electric bills – including withholding natural gas from the market or overcharging ratepayers – and asked the FTC to look into all possible angles as part of its investigation," a press release from Schumer's office said.

Schumer noted the example of a Syracuse-area National Grid customer who was charged $67.68 in February 2013 and $65.02 in March 2013, and then charged $84.58 in February 2014 and $106.80 in March 2014 – despite using substantially less electricity than last year over the same period.