Fluctuating Electricity Rates, My Foot

     HARTFORD, Conn. (CN) – Subjecting consumers to a “heads I win, tails you lose” pricing scheme, an energy company charges a premium for electricity regardless of market fluctuations, a federal class action alleges.
     Lead plaintiff David Steketee, a resident of Morristown, N.J., filed the complaint Wednesday against Viridian Energy in Connecticut, where the Nevada company maintains its principal place of business.
     Viridian markets a “variable rate” electricity plan for residential consumers, meaning that the rate should fluctuate with the wholesale market price for electricity, the class alleges.
     When the market price goes down, however, Viridian allegedly fails to lower prices.
     “Through this scheme, Viridian subjects consumers to consistent and unlawful ‘heads I win, tails you lose’ pricing,” the complaint states.
     Indeed Viridian raised the price for its customers when the market price went down on at least one occasion, Steketee says.
     The complaint describes records of the price Steketee paid for electricity and the wholesale market price during an eight-month period in 2014.
     Steketee’s first calculation allegedly found that Viridian was charging 124 percent over the market price, and that this number rose to more than a 400 percent over the market price.
     “Contrary to Viridian’s representations and obligations, Viridian consistently and improperly charges an extraordinarily high premium rate for electricity regardless of fluctuations in the underlying market price,” the complaint states.
     Steketee complains that Viridian charges “exorbitant premiums without adding any value to the consumer whatsoever.”
     “Viridian does not either produce or transport electricity,” the complaint states. “It has no role in running or maintaining power plants or power lines; it does no hookups or emergency response. Indeed, Viridian does not even handle customer billing: that, too, is handled by the Distribution Company. Essentially, all that Viridian does is act as a trader in the transaction. Yet it charges several multiples of the amount the generation companies receive for making electricity and the distribution companies receive for transmitting power, maintaining power lines, and handling emergency services and customer billing and calls.”
     Steketee says “Viridian’s costs, other than its wholesale cost of power, were relatively fixed and could not have justified the massive increases alleged.”
     Viridian did not return calls and emails seeking comment.
     Steketee wants to represent a class of similarly situated New Jersey consumers.
     He seeks punitive damages, restitution and an injunction for consumer fraud, bad faith and unjust enrichment.
     The class is represented by Robert Izard with Izard Nobel of West Hartford.

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