fbpx

Verde Energy Variable Rate Plans Excessive Rates Class Action

More than one class action has shown the difficulties of knowing how much competing energy companies will charge customers once their initial teaser rates have expired. This complaint alleges that Verde Energy USA, Inc. rolls customers over into expensive “variable rate” plans that don’t seem to vary much when rates fall. 

The class for this action is all persons in a Verde Energy variable rate electric plan for a property in Massachusetts, at any time within the applicable statutes of limitations up to the date of class certification in this case.

Verde claims that its variable rates are tied to the market rate for electricity. Yet the complaint says, “Verde routinely charges its consumers up to almost three times the underlying market rate… Specifically, even when the market price goes down, Verde’s rate remains at an inflated level several times higher than the market rate.”

The idea behind energy deregulation was that consumers could pay less for electricity. They would sign up with companies that could deliver it for less and would therefore save money. But according to the complaint, this has not happened. A 2018 report by Massachusetts Attorney General Maura Healey says, “Massachusetts electric customers who switched to a competitive electric supplier paid $176.8 million more than if they had stayed with their utility company during the two-year period from July 2015 to June 2017.”

When plaintiff Melissa Davis signed up with Verde, she received a letter claiming that the company would supply her with electricity “at a very competitive rate[,]” while its Terms of Service Agreement linked the company’s variable rates with the wholesale market rate. 

The complaint says that this led customers to believe that rates would rise when the market rate rose but also go down when the market rate went down. Instead, the complaint says, “Verde used its Variable Rates as a pure profit center, increasing the rates … when wholesale prices rose, but staying at a level almost three times the wholesale market rates when the wholesale prices fell.”

The complaint reproduces a chart showing how much plaintiff Davis paid above wholesale prices during the time she was on Verde’s variable rate plan. The percentages vary from 52% to 231%, with the price most months being well over 100%. In addition, it shows that prices did not fall in accordance with falling wholesale prices and even rose when wholesale prices fell. Since Verde’s costs are relatively fixed, the complaint says, nothing can justify the rises in price.

The complaint claims that Verde’s statements about its variable rate plan being tied to market rates is false. It says that the company has breached its contracts as well as the covenant of good faith and fair dealing, among other things.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Verde Energy Variable Rate Plans Excessive Rates Complaint

April 17, 2019

More than one class action has shown the difficulties of knowing how much competing energy companies will charge customers once their initial teaser rates have expired. This complaint alleges that Verde Energy USA, Inc. rolls customers over into expensive “variable rate” plans that don’t seem to vary much when rates fall. 

verde_energy_variable_rate_plan_compl.pdf

Case Event History

Verde Energy Variable Rate Plans Excessive Rates Complaint

April 17, 2019

More than one class action has shown the difficulties of knowing how much competing energy companies will charge customers once their initial teaser rates have expired. This complaint alleges that Verde Energy USA, Inc. rolls customers over into expensive “variable rate” plans that don’t seem to vary much when rates fall. 

verde_energy_variable_rate_plan_compl.pdf
Tags: Energy, Variable Rates