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Thursday, April 16, 2015

Consumer Alert about North American Power

Local mail blitz offers South County consumers lower electric rates
By Will Collette
This is a screen shot from the Connecticut Better Business Bureau's
report on North American Power as of April 15.

I want to thank Bob Yarnall for bringing this to my attention. If you’re like many of us, you’ve been getting mail from North American Power lately offering to sell you electricity at appealing low rates.

As the saying goes “caveat emptor,” which is Latin for “don’t be a sucker.” The other saying that applies to this situation is “if something looks too good to be true, it probably is.”

So it goes with these offers from North American Power. Based in Norwalk, CT, they are getting some attention for the sheer volume of their advertising effort. Thomas Kogut, information chief for the state Public Utility Commission told EcoRI their ad campaign was “unprecedented.”

In the letter I received, they offer me a rate of 8.99 cents per kilowatt hour. National Grid’s current basic rate for average consumers is 10.11 cents per kwh.

However, the 8.99 cent rate is only good until the end of the year. As Kogut explained, the rate is similar to a credit card “teaser” rate – low to start and lasting for a short period, after which the company will “adjust” the rate.

As of today, the Connecticut Better Business Bureau describes North American Power as “Not BBB Accredited” and reports that it closed 623 consumer complaints over the past three years. 183 were over the company’s advertising and sales practices; 303 were over billing and collection.

And that's not all.



If you get one of these, beware!
In 2011, the Maryland Public Service Commission fined North American Power $100,000 for 19 “deceptive practices” in violation of state law.

The Hartford Courant listed North American Power as having had the second highest number of complaints filed against it with the state Public Utilities Commission in 2014.

On top of everything else, EcoRI notes that if you care about choosing a provider that offers you at least some green energy, North American Power is not for you.

North American Power also uses sales representatives to directly market their service. They use a business model called “multi-level marketing” (MLM) or at least they did until recently

Wikipedia defines MLM as a business set-up where you earn money not only from your own sales but of sales people you recruit. Some examples they give include Avon Cosmetics and, of course, the classic Ponzi scheme.

I have not heard of a battalion of door-to-door electricity sales people hitting Charlestown or received any calls from them among all my other junk and robocalls, but apparently it’s a thing.

ElectricityWatch.org says that North American Power sales reps have told potential clients that by signing up with NAP, “you will be supporting charitable organizations” apparently because NAP adds some donations to your energy bill. Electricity Watch advises you to make your own direct donations to charity and not sign up.

According to BehindMLM, North American Power announced recently that it was ending its MLM sales model, but did not give a reason why.

So maybe we won't be invaded by an army of sales reps from NAP after all.

Look, no one is happy about our high electricity rates, especially when there is a glut of natural gas (the main fuel used by National Grid and many other utilities in the Northeast). While you get agita over your electricity bills, clever business people see opportunity and make you offers that are really hard to refuse.

But be strong. Pay attention. Read the fine print. Do your due diligence even if it’s limited to running the company through a Google search.

There are a lot of predators out there so be careful.