Dive Brief:

• The New Jersey Attorney General is suing competitive electricity suppliers Systrum Energy, Palmco Power NJ and HIKO Energy following thousands of complaints against the company's unexpectedly steep price hikes this winter.
• The state Department of Commerce and the Board of Public Utilities launched an investigation into practices after customers that had been promised low electricity prices were hit with high prices following the harsh winter weather. Consumer groups and the BPU received 1,463 complaints about the three suppliers. 
• The suit alleges the three companies misrepresented their plans to customers by promising low rates they didn't deliver on. The suit alleged Palmco Power and HIKO Energy had also engaged in "slamming," or switching customer accounts without telling the customer or gaining their consent. 

Dive Insight:

Acting Attorney General John Hoffman said that "deception and misrepresentation of consumers has no place in any aspect of New Jersey’s marketplace​." He echoed the suit's deference to customers, saying that the suppliers had "lured" customers with false promises of cheaper rates. "Consumers who hoped to save money instead saw their bills increase to unconscionable levels." 

By switching to the three utilities, customers ended up paying far more than if they had not switched providers. The state is seeking compensation for affected customers. Currently, third-party utilities are largely unregulated, though the BPU is developing tougher regulations for suppliers.

Despite the three companies' conduct, the BPU reaffirmed its faith in New Jersey's competitive energy market: "While today’s announced allegations against a few energy suppliers should send a clear message to the energy supply industry, consumers should understand that there is still a robust market of alternative energy suppliers to be considered that may offer savings on electric and gas bills.”

The three competitive energy suppliers have not responded to the suit.