ST. PAUL -- Two Minnesota energy companies overcharged customers who believed they could save money by enrolling in a fixed-rate utility program, according to a complaint filed against the utilities.
Xcel Energy and CenterPoint Energy advertise their fixed-rate programs as a way for customers to avoid fluctuating monthly natural gas costs, Minnesota Attorney General Lori Swanson said.
While the companies do warn customers might pay more if gas prices drop, the complaint states, the utilities don't tell people they likely will pay "significantly more" by enrolling.
"It's a little bit like betting on a roulette wheel with a casino that already knows where the number's going to stop," Swanson said.
Swanson, a Democrat in her first term, filed a complaint against the two companies with the state Public Utilities Commission. She wants the programs investigated and halted.
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Xcel Energy issued a statement following Swanson's news conference announcing the action. The company said it hadn't reviewed the complaint but planned to work with the attorney general and others to "ensure a full understanding of our program and address concerns."
"We will carefully consider the recommendations and will offer changes to the Public Utilities Commission that best meet our customers' needs," the statement said.
A review by Swanson's office concluded Minnesotans paid $26 million more than if they had opted against the programs. The statewide programs tend to be used by senior citizens and others on fixed incomes.
The attorney general's office opposed the programs when they were created, Swanson said.
Xcel Energy started its Fixed Monthly Gas Payment program in 2005. CenterPoint Energy has run its No Surprise Bill plan for five years. An estimated 50,000 Minnesotans were enrolled in the programs last year.
"Most of those people paid lots more," Swanson said.
The investigation showed 9,187 Xcel Energy customers enrolled on the fixed-rate plan paid 63 percent more than if they hadn't enrolled.
Retiree Tyler Smith, 67, said he enrolled in Xcel Energy's program in late 2005 without a clear understanding of the conditions. Smith, of Stillwater, said he paid $1,000 more by signing on, and was contractually obligated to stay in the program for a year. He is no longer enrolled on the plan.
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The complaint likely wouldn't result in people like Smith being reimbursed by the utilities, Swanson said.
"At the very least they should stop the program," he said.
