Gexa-Gouges.com - Dedicated to Stopping Consumer Gouging by Gexa Energy, PUCT Certificate # 10027

Please contact me if you have relevant information. rich@gexa-gouges.com. I want to hear your Gexa stories.  I would like to know what part of the state you live in, what happened with Gexa, and what Gexa’s response was.  If you were gouged, join our efforts to stop Gexa gouging in Texas!

Update - April 16, 2009 - Tomball, Texas - Where Did Jeff Herbert Go?

I’m finding through this web site there have been lots and lots of people gouged by Gexa crooks. Crooks is the nicest word I have for these jerks.

Did you know their CFO was one of the top guys at Enron? They learned how to get rich quick from the University of Enron! There were details on the About Gexa tab above about Jeff Herbert. There is an interesting email there showing just how high Jeff was at Enron. But a few weeks after Gexa-Gouges.com placed a spotlight on him, they removed him from their site. There is no new information about him or a new CFO at all.  Just disappeared. Seems really strange since he had been with them since February 2004.  Does anybody know where Jeff Herbert went?  If he is still at Gexa, why did they remove his biography from their web site?

Update - April 15, 2009 -  Gexa Basics, Howto Offer Customers a Rate of $0.11 but Actually Collect $0.144 per KWH?

Here is a theme I hear from almost everyone who sends me email - rich@gexa-gouges.com. “I signed up for what seems like a good rate, my contract ended or changed, and they hit me with super high rates for several months before I realized it.” I too was on a month-to-month rate and was stunned when they raised the rate to the highest I have every seen anywhere any time. I could not understand why they would hammer month-to-month customers so badly knowing full well most would move to other providers.

Now I think I know why. They need that contract month-to-month rate to be VERY HIGH because at some point most of their customers end up on it for some period of time. The rate is so outrageously high that anyone billed under it for even a month or two contributes a wind-fall like profit to Gexa’s coffers. Bonus time! Same game Enron played.

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 loose 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.  They say you are on month-to-month at “market rates”. (I just got an email from an upset customer by the name of Jack who said they did this to him, “market rate” of 20.9 cents/KWH. I just paid my TXU bill on a month-to-month rate at a little over 9 cents/KWH - less than half!).

When you call to ask about the massive jump in price,, they recommend a "meter read" to see if there was a meter error. The re-read costs you $6.00 and is done by Center Point. Gexa knows full well there is nothing wrong with your meter (and if you know your typical KWH usage you will see right off its the rate, not the amount that drives the bill). BUT it takes time to complete a meter check which gives them another month at the mind blowing gouging rate (because you are still using electricity in the mean time). They take their time updating you about the meter results, which are always no problem found. So as such, your only option now is to just pay the bill. By the time you go through this wild goose chase and finally get pissed enough to change to another vendor or plan at the end of the current billing cycle (only 12 such chances per year), you have paid a gouging ripe off rate for 3 or 4 months beyond the end of your contract.

Here is how it looks on paper. Let's use easy numbers. Lets say you use exactly the same amount of power each month - 2000 KWH. Your contract rate was $0.11 per KWH and your normal bill is $220.00 a month (2000KWH X $0.11=$220). Your contract is a competitive rate for 6 months. Since you have auto pay and trust your electrical provider you miss the termination date when your contract ends. (You may have assumed you would be contracted or the rate would be similar at contracts end. NOT!)

So by the time you notice and call, you've been billed $440 for a month or two at double the contract rate you were paying. You are now on their month-to-month no contract rate and they are charging you $0.22 or more. (Some have told me their rates with Gexa were well above $0.22. My last bill with them In Dec-08 was $0.214) So if they gouge for 3 months, that's about $600 extra bucks from your pocket to theirs.

Now take the 6 month contract plus 3 months gouge and add it all together. That’s 6 months @ $220 PLUS 3 months @ $440 for a TOTAL of $2640 for 9 months. During the same 9 months you used a total of 18000 KWH (9 months X 2000 KWH). To calculate the actual rate divide the dollars $2640 by the 18000 KWH to arrive at your 9 month actual rate of $0.147. This is well above any of their contract rates. Obviously if they had told you what you would end of paying in the end, you would have shopped somewhere else. Obviously if it takes you more or less time to catch them, or the high rates are summer months when you use lots of power, your gouge will vary!

So you just thought you had a competitive rate of $0.11! They just made their fat profit on the other end of the contract and the Texas PUC lets them get away with it! Throw in a few late fees or disconnect fees while you fight with them or because their billing system is known to record payment dates in Gexa's favor and you have a real cash cow - your cash, their cow!

Update - March 18, 2009 - Tomball, Texas

Is Gexa a down to earth, ethical, honest, and hard working business seeking to serve Texas energy consumers - OR - chapter two in how to get rich fast using deregulation loop holes?  Everyone in Houston (and most in the US) remember a little Texas company called Enron.  Did you ever wonder where all the top Enron executives landed (other than those who landed in jail)? Do you want to buy your energy from Enron-2? I don’t know who knew what at Enron, or who went where.  But I can tell you where Jeff Harbert landed. I can also tell you Gexa is following the same formula, ie,  take advantage of deregulation as much as fast as possible!   Read more ....

Update - March 4, 2009 - Tomball, Texas - Join Us in a Class Action Law Suit Against Gexa

(This update got delayed by spring break.  Yes I’m a dad and this is not my full time job.)  Through the magic of cyberspace I continue to find many others out there who are victims of Gexa gouging. Most are very irate to say the least.  All feel like Gexa took advantage of them.  Many have sent me their stories, some of which you will be able to read soon on the newly added Consumer Gouges page.  Even better, I’m beginning to connect with people who want to actively support a variety of sanctions against Gexa’s practices.

We have also attracted some experienced and capable professionals with expert advice.  So we are moving from the rant and rave phase toward the “consumer action” phase. Good consumers pay their bills, expect quality services, and fair and ethical conduct. Good consumers also know market pressures and the law are here to protect against rip-off practices. I’ve added a new tab above entitled You Can Help.  On it you will find out how to become part of a class action suit. There is a serious effort underway to file a class action suit against Gexa for false advertising.  See the details on the You Can Help page. We need people to add their names to this effort.  We need people who have been gouged to join us. Help us show Gexa how Texans demonstrate free enterprise in action!

If you want to be updated on our efforts please send your requests to me at  rich@gexa-gouges.com Of course you can continue to check this web site. Your information will be protected.

Initial Posting - February 2, 2009 – Tomball, Texas - Can a Texas REP Gouge and Slam Their Own Customers?

I have Two Questions

1. Are utility companies in the state of Texas subject to the same consumer protection laws as are all other Texas retailers?
2. Is it considered slamming if an REP changes one of their own customer’s to a different plan (that is more profitable for the company) with no notification what so ever to the customer?

In the greater Houston area of Texas, our electricity is purchased from so-called “retail electrical providers” or (REPs).  We are free to choose our provider. I recently changed from Gexa Energy after suffering through what I consider very poor business practices at best and unethical or even illegal practices at worst. It seems that Gexa Energy has interpreted  “open marketplace” as “open season” on customers.

I’ve called lots of agencies and so far no answers.  I don’t mean I didn’t like their answers. I mean they did not have or would give answers to the two questions below. “Nobody has ever asked that about REPs.” “I don’t know”.  Someone in the State’s AG office actually said “We don’t interpret the law. We have to remain neutral.”  I think it’s because the answers will highlight some big loopholes that companies like Gexa Energy are more than willing to use to their advantage.

I believe in free enterprise.  I am for deregulation.  I believe America has the highest standard of living in the world because of democracy and free enterprise. It is second to nothing when government and business alike follow the highest ethical standards with a keen sense of fair play.  This is what makes America different from most of the world.  Our system works when voluntary ethical conduct is high, truth, trust, and fair play abound, and extensive governmental controls are minimal.  It is at it’s very best when political and business leaders join with the public’s interest at the center of their efforts.

When Gexa Energy takes unfair advantage of their business position to exploit customers to enhance shareholder profits beyond reasonable returns or for short term gains, THEY ARE NOT acting in the best interest of their customers. They measure their success in terms of stock price, new investors attracted, dividends paid out, or new millionaires made. Customer satisfaction, long term company stability, long-term customer relations - not relevant. space to the bottom line.

How do you police this?  Another important American right. It is called freedom of speech.  We can shine a light on any company and let the public decide if those practices are acceptable.  This is the most important part of deregulation and it is completely in our hands.  We don’t need to call Austin! Gexa needs the spotlight and we are here to light it up!

I feel strongly that information here must be true and accurate. Therefore if you find error or fault with any of the following information, please E-mail me with your comments or corrections.  E-mail me at rich@gexa-gouges.com.  If you’ve had the same or similar experiences, communicate with me by E-mail so I can add your voice to mine.

My first question is a simple one:

• Are utility companies in the state of Texas subject to the same consumer protection laws that all other retail organizations are subject to, in particular, laws forbidding companies to gouge consumers in areas under declaration of natural disaster? 

Specifically, are Texas REPs (Retail Electrical Providers) allowed to charge whatever they want during and following a natural disaster?  I am not talking about distribution costs by the “power line companies”. Power lines suffered so much damage during Ike.  That is in fact covered under a separate line item on your bill and we all pay our share. What I am talking about is electrical power from the REP, much of which was not even deliverable in September due to power line damage by Ike.

I live in a single family dwelling with 8 adopted children, my wife and myself.  Yes it is a big all electric house, lots of kids, laundry, baths, commercial freezers, my own well, etc. I am used to big electrical bills. I’ve installed high efficiency everything but it is still a big family.

My electric bill for the four months of September through December last year (under a different REP) was a total of $2784 for 24224 KWH of electricity.  My electric bill with Gexa Energy for the same months of 2008 was $4942 for 23611 KWH. That is an increase of over %77 - for less electricity.   Seems way way out of sorts. Natural gas drives our electrical costs in Texas and that was way down.  Not a valid excuse Gexa!

I chose the four month Sep-Dec to compare because Hurricane Ike caused an estimated bill in September 2008 and an adjusted bill in October.  The estimates and adjustments made it hard to compare month to month.  There is no exact record of power used for the estimated month of September.  Furthermore, for reasons Gexa could not explain, I did not get a bill in November so I cannot tell you exactly what each month’s usage was per Gexa Energy’s records.  Maybe they wanted to bill two months at the higher December rate.)

So why do I think they are gouging?  Because the highest rates Gexa Energy charged by far (maybe in their history) was the month of Ike and the 3 months following. Even though the price of natural gas in Texas (which is directly linked to our cost of electricity here) has been falling since June of 2008, their rates were skyrocketing. Not only was that my highest rate per KWH rate, but during the same month natural gas was the lowest it has been in the past 5 years and still expected to go lower.  The rate they charged me the month of Ike was $0.195 then next two months $0.2104. Gexa charged rates as low as $0.125 for contracts as short as 6 months during this same period.

Why gouge a good customer like me with good credit, user of lots of electricity, pays on time, homeowner for 20 years? I think it is easy to understand their motives:

• Most likely - scare or pressure me into signing a term contract knowing full well their balance sheet will look very good loaded with lots of contract-bound customers paying over market rates at a time when energy costs are falling like a rock.  In other words, push as many as you can as fast as you can to sign up for say $0.13 / KWH knowing full well the market will soon be at $0.10 or maybe even less and customers will have lots of lower cost options.  Penalize the ones that don’t sign up. Hit them hard with a gouging rate to improve your balance sheet during a hurricane event that would cost investors or investor confidence.
• Make sure everyone on your staff tells customers it is their own fault for not signing a longer term contract every time they call to ask “why aren’t rates following wholesale prices”.
• Charge a high rate because they can. There is nothing (well, almost nothing) you can do about it. Besides, its just business.

Of course Gexa’s “strategy” could backfire, especially in Texas. When Hurricane Ike closed down the Gulf coast of Texas, we got out our chain saws and cleared the streets ourselves. We helped each other.  We have a strong sense of community and expect the same from our businesses.  Companies like HEB and Wallmart went our of their way to help people impacted by Ike in their communities. Rather than gouge like Gexa, these and others worked to help those impacted, not take advantage of them.

Sign a longer term contract? Ask yourself why you would even want a longer term relationship with a company that simply screwed you so badly during the test drive? I like being loyal to a company that is loyal to their customers, giving valid verifiable services, not padding bills with extras, (turns out Gexa charges extra even to pay with a credit card - fees others include in their base-rates.) or taking advantage whenever possible.  Worse yet is a company that intentionally sets traps and seeks to create ambiguity so taking advantage of people purely for financial gain is considered a business strategy!  (Remember when business strategy was NOT tricking your customers?)

Over the past two weeks I have contacted the following agencies seeking an answer to this question.  Here is what I learned (I recorded the conversations):

• I called the Texas Attorney General's Office.  The person I talked to did not have an answer to this question. When I pressed her asking why REPs wouldn’t be subject to the same consumer retail laws, she actually said “We do not interpret the laws. We have to remain neutral…”  I understand neutral. I don’t understand how the AG can not interpret the law.  If the AG doesn’t have an answer, then know who the heck does know?
• The Texas AG office referred me to the US Department of Energy, Energy Information Administration.  The person I talked to there said it was the first time anyone had asked the question.  She also said it is in fact the Attorney General’s Office in Texas that should be able to answer the question.  She wished me luck.
• I called the Texas State PUC.  They said they were not the ones to ask about gouging.  They also told me that “Texas electrical service for much of the state is deregulated and providers can charge what ever they want.” She said if I wanted to file a complaint they would check to see that my meter was in fact read properly and that Gexa complied with the law. I told her I did not dispute the meter reads but only the rate and if they could charge what ever they wanted, then filing a complaint would be a waste of time.  She said it was up to me.
• I contacted a local TV station.  I was told they are working on a story and to keep them informed.
• I contacted my State Representative’s office, Dan Patrick and asked for a meeting. I’m hoping a state rep can get answers to this question when i couldn’t.

Question two, also simple, (having arisen from my research) is this:

• Is it considered slamming if an REP changes their own customer’s rate plans with no notification what so ever?

I know slamming is traditionally considered to be one company illegally taking customers belonging to another company without authorization. But what if a company “slams” their own customers from one plan to another to increase their own profits - without any notice to the customer? Is that also slamming?

I signed on with Gexa Energy to their month-to-month plan in December 2007.  December through March 2008 was billed under rate plan RR071A5. In April Gexa Energy bill me under rate plan RR081C4.  May and June was plan RR081C6.  July was plan RR081C12. August, September, and October was plan RR081C21.  November and December were billed under plan RR081C24. That’s 12 months with 6 plan changes and zero notifications! I did not even pick up on this until I started researching for this web page.

I have been totally unable to locate even one of the disclosure documents for these plans even though the Texas PUC requires an Electricity Facts Sheet for plans among other information.

One year ago I chose Gexa Energy’s month-to-month plan because in Texas, our electricity is closely tied to the cost of natural gas. I, like many others, felt certain that natural gas prices through the first half of 2008 were over priced and over sold.  They were!  I was right on! In fact prices have been dropping since the middle of the year and are in fact now over 30% less than this time last year and still dropping. I did not want to sign a 12 or 24 month term contract at peak gas prices believing a “fixed rate” term contract would be high for a short time but would give me a chance to change once gas prices came down to reasonable levels. With Gexa Energy’s outrageous termination policies, I would have really had no choice but to pay ridiculous prices because getting out of a bad contract would really cost you.

Little did I know that Gexa Energy plays futures differently!  I recall the actor/comedian WC Fields when asked if gambling “Was a game of chance?”. His answer: “Not the way I play it!”. When Gexa Energy apparently plays play the futures like everyone else? Not the way they play it!