Thursday, April 30, 2009

Gexa Energy sucks.

Gexa Energy is a Retail Electric Provider headquartered here in Houston. We used them from the fall of 2006 until yesterday, when I switched to another company because I discovered that Gexa was screwing customers like me.

My trip down the rabbit hole that ended with this revelation began yesterday when I finally decided to investigate an annoying anomaly regarding my bank's online bill pay service.

All of my other payees - from credit cards to gas cards to other utility providers such as the City of Houston, Comcast and Centerpoint - now all receive their payment within one to two days of my online payment authorizations. For several months now, Gexa has been the lone outlier - it takes five business days from the time I authorize payment online to the time they get it. This means that the effective due date for my electricity payment is really one week prior to the due date printed on the bill; if I miss it, I get hit with a late fee.

So yesterday I called Bank of America to ask them why it took so long for my money to reach Gexa, when all the rest of my payees get their money within a day or two.

"It takes longer because we have to send this company a paper check," the customer service rep said.

A paper check? Really? Doesn't that kind of defeat the purpose of online bill pay?

"Why can't you send them the money electronically, like you apparently do for everyone else?" I ask.

"Because this company does not accept direct electronic transfers from our bank," the service rep explained.


Now, I have no idea why Gexa does not accept electronic transfers from my bank. Maybe their system isn't capable of handling and processing electronic transfers, or maybe their system has a problem that's unique to transactions involving Bank of America. The conspiracist in me, on the other hand, wondered if they did it on purpose: after all, if it takes longer for their customers to get their payments to them, then there's a higher likelihood that the payment will arrive late. That, in turn, will allow Gexa to make some extra money from late fees.

So I decide to do some online sleuthing to see if other Gexa customers were having similar problems in paying their bills. What I quickly discovered was something far more troubling than bill payment: it turns out that Gexa has been overcharging me for electricity.

I freely admit that I hadn't been paying attention to my electricity bill's per kWh rate lately. When I receive the electricity bill, I look at the monthly charge, I look at the power usage, I say "damn, we use a lot of electricity in this house," and then I throw it on top of the incoming bill pile and don't give it another thought. And that's only when I actually see the electricity bill; I was overseas for so many billing cycles last year wherein never even saw the actual bill.

Anyway, I hadn't noticed until yesterday that Gexa was charging me 21.09 cents per kilowatt hour for my electricity.

I called my parents, who live two blocks away from me, and asked them who their provider was and what they were paying. They weren't using Gexa, and they sure as hell weren't paying 21.1 cents per kWh. So then I went to a local electricity cost comparison website to see what other companies were charging for electricity. Nobody else was charging 21.1 cents per kWh, or even coming close.

It definitely appeared that I was being ripped off.

Wondering how long has this been going on, I pulled out all my old electric bills (which, being the pack-rat that I am, I save) and reviewed our recent electric bill history. We joined Gexa in the fall of 2006 because our previous electricity provider was charging us an average of 17.8 cents per kWh. Gexa promised us a better rate and, as my review of old electricity pills showed, they initially delivered on that promise, with per kWh rates hovering around the 13.4 cents mark.

But then, after about a year, the per kWh rate went to 14.1 cents. In February of 2008, it jumped to 14.5 cents. A month later, 15.5 cents. In May, it was 16 cents; in June, 17 cents. By August, I was paying 19.6 cents for kWh for my electricity. And by October of last year I had reached 21 cents per kWh.

Curious, I took a look at natural gas and coal prices, which according to Gexa's latest "electricity facts" mailer account for 45% and 39%, respectively, of Gexa's sources of power generation. Sure enough, both natural gas and coal had experienced a significant increase in prices through the latter part of 2007 and the first half of 2008, which explained Gexa's rapid increase in rates during that time.

But, since around mid-summer of last year, as the global economic crisis began to take hold, both natural gas and coal prices have fallen rather dramatically. So why, then, is Gexa charging me more for electricity now than they were back in the summer of 2008 when coal and natural gas prices were at their peak? They're not doing this to all of their customers; I noticed on that aforementioned rate comparison website that they were offering fixed-rate plans for as little as 11 cents per kilowatt hour. A guy up on Tomball, who has created a website entitled Gexa-Gouges, thinks this is all part of their game:
Here’s how it works. Gexa attracts you with a competitive rate. The rate is especially good on their short term 6 month contracts, so you sign on. But, almost all of us lose track of time and the end of the contract comes before realizing it, especially with power as we are not used to having a predatory vendor. There is no notice (or of late a short notice) that your contract is at an end. You do however finally notice that they've hit you with several months that are at least double your previous rate, their so called month-to-month rate.
If true, that's exactly what happened to me. We signed up with Gexa back in 2006, got a competitive rate for about a year, then paid no attention as the year contract expired and the month-to-month rates slowly inched higher and higher.

Of course one could point out that I could have kept from being ripped off had I paid closer attention to my electric bills, and that would be a valid critique. But on the other hand, why would a company want to screw its customers in this fashion? Once their customers find out that they are being gouged, they'll go to another provider (as I did yesterday, to a company that charges 14.1 cents per kWh) and they'll tell people about Gexa's rip-off (as I am doing with this post).

It all seems very short-sighted on Gexa's part, but the perception that Gexa doesn't appear to care about its customers, other than to screw them, is underscored by the fact that they can't even protect their customers' private data. About a year ago Gexa's computer systems were hacked and the security of sensitive information - names, birthdates, social security numbers of customers - was compromised.

We got a letter from Gexa about the intrusion a few weeks ago. The letter claims that they waited an entire year to inform their customers of this security breach because "law enforcement authorities directed Gexa Energy to withhold this notice until now, pending their investigation." I'm not sure if I totally believe that, but the fact is that this breach should not have occurred in the first place; companies have a responsibility to keep their customers' private information private.

So, to summarize:

1. Gexa Energy does not accept electronic payments from banks (or, at the very least, the second-largest bank in the country), making payment transmission times longer and thereby increasing the likelihood of late payments.

2. Gexa Energy is charging its older customers with ridiculously high electricity rates that do not appear to be justifiable under current energy market conditions, even as they entice new customers with competitive rates for fixed contracts.

3. Gexa Energy has failed to protect the private and personal data of its customers.

Oh, and did I mention that Gexa has an "unsatisfactory" rating from the local Better Business Bureau?

No doubt about it: Gexa Energy sucks. Do not do business with this electricity provider.

UPDATE: I notice via my StatCounter that the folks at Gexa have come across this entry. I'm hoping that this post will alert them to the error of their ways. But there's also a possibility that upon seeing this they'll come after me with a SLAPP. If that happens, I'll lawyer up.

7 comments: said...

Deregulation rocks!

Personally, I have never paid such high rates and gotten such bad service from my power company as I have in the "competitive" Texas market.

Sounds like they are particularly bad, but I have bad news for you: they ALL suck to some degree.

John said...

I totally didn't mean to put my real email address in there. Could you delete it for me?

Thomas said...

John: I don't think I can change your name in the first comment without deleting the entire comment.

You are, of course, correct that all REPs in Texas suck, but some of them suck more than others.

BTD said...

ME TOO! Like you, it's mostly my fault for not paying attention to the rate they were charging. I tried to go on their website to review my bill. Guess what! You can't see your bill online!

Lesson the $/kw-hr and shop around. I've changed to StarTex as of 3 days ago. We'll see how that works.

redd said...

star-tex is just as bad. My bank, Chase, has to send them a hard check in the mail. customer service is horrible. If you are holding when they close, you will still be holding when they come back to work the next day.

HS @ Our Debt Blog said...

I love your article, I just wrote a quick post on Gexa and posted a link to your article in my comments section.


Anonymous said...

Gexa is in the business of charging for re-connect fees and late charges, which is why they don't post your payments for a week or so. That is why they will not accept ACH payments - they would arrive within 48 hours and be posted. Also, they will not reveal executive names, and claim they have no email. I have filed a complaint with the Texas PUC, and I urge you all to do the same. They need to get their certification yanked.