Beware the teaser rate


To the Editor:

As a member of the Cape Light Compact Governing Board representing Oak Bluffs for the last three years, I wanted to respond to the Letter to the Editor published December 4, “Reduced Electricity Rate.”

The letter gave a website for a competitive power supplier that was offering lower electric rates for 12 months. This particular company was offering a low rate, which also came with a $100 early termination fee, plus a monthly service charge of $4.95. There is also a term in  the contract which states, “If for any reason this supplier is no longer able to economically continue this Agreement, [the supplier] may terminate this Agreement at any time after complying with applicable regulations.” This means that the supplier may terminate the contract at any time if they are losing money, which could be in the middle of the winter when prices in the market are extremely high.

On the other hand, longer-term contracts may look attractive now, but may be high relative to the Compact’s pricing when it changes in July. This is because our current pricing includes the most expensive months of the year.

With volatile electric prices, there has been an increase in the number of competitive power suppliers marketing to customers in our territory. Many of the suppliers will offer a teaser rate which is a price that will start out low but then skyrocket with no notice to you, similar to a credit card’s introductory rate.

Cape Light Compact encourages customers to be very careful when evaluating power supply offers. Never agree to a contract over the phone, and ask to receive the information in the mail so you can review it on your own time. Some common things that are seen are: early termination fees, monthly service fees, and conditions in the contract that would allow the supplier to adjust pricing or terminate contract with virtually no notice.

While Cape Light Compact’s pricing has increased for the period of December to July, 2015, with it comes stability. There are no termination fees and the prices are fixed for seven months. There will be no adjustment to the price and the Compact will not terminate your enrollment during this period.

In this period when pricing is higher, we are encouraging customers to visit for ways that they can save on their energy bills through means of energy efficiency. There is a lot  of faulty information about electricity prices circulating — some deliberate and some because it is a confusing issue. The Compact offers a choice and is always happy to discuss questions you might have.

Richard Toole

Oak Bluffs CLC board member