Such letters are an age-old art, perfected by long-distance and credit-card companies, in which "the large print giveth, and the small print taketh away," as the noted economist Tom Waits once said. Take a recent flier proffered by Dominion East Ohio Energy, which led with the bold headline "Enjoy A Stable Price On Natural Gas Through May 2004."
On the surface, it seems like a swell deal. Dominion is offering a "guaranteed fixed price of $7.25 per mcf" for the next three years. (Mcf, for those not fluent in Geek, means 1,000 cubic feet.) When compared to The Edge's last bill -- $10.66 per mcf -- the new price appeared to be a 30 percent savings. But what the front page giveth, the sales agreement -- conveniently out of sight on the back page -- began to withdraw.
This fabulous deal doesn't include sales tax. Nor does it factor in transportation, customer service, and other "applicable surcharges," the disclaimer noted. All of which meant that, according to the Public Utilities Commission, our 30 percent savings had already dropped to 10 percent before we finished reading the letter.
Of course, 10 percent is still a good deal, especially when you're a cheapass like The Edge. And since demand for natural gas is rising, and deregulation means prices are subject to market forces -- i.e., you can be screwed as much as the market will bear -- it seems wise to lock in now, even at a rate that's twice what it was a year or two ago. Besides, it's guaranteed, right?
The sales agreement also contains the appropriately vague phrase "In the event the Dominion East Ohio Energy Choice Program is terminated prior to the end of this agreement . . ." This sent The Edge's Bullshit Meter into high alert. What about the guarantee? And who gets to do the terminating?
So we called Dominion's consumer line (888-284-3542) and spoke with a nice woman named Beverly. She assured us that Dominion is a sturdy and honorable company, and had no intention of bailing on its word. But, yes, the sentence in question does allow the company to do just that.
So what you're saying, Beverly, is that the price isn't really guaranteed?
"You're asking me questions that are just so out there," she said. "You, as a consumer, would just have to take a chance. It's just like buying a car."
The Edge didn't find the car sales analogy particularly comforting. So we called Joseph Meissner, a Legal Aid attorney who specializes in utilities cases. "Obviously, it's been put in there by lawyers as some kind of out," he said of the termination clause. "I've read a number of these contracts, and all of them are filled with traps. These traps are in favor of the companies, not the customer."
Unfortunately, nobody seems to know what these traps are. Maureen Miller, a spokeswoman for the Ohio Consumers' Counsel, would only say that it's an "ethical offer," and that her agency doesn't make recommendations on specific deals.
So we dialed up Shana Gerber, a spokeswoman for PUCO, which oversees utilities. What would happen, The Edge asked, if natural gas prices turned Californian and rose to, say, $15 mcf, and Dominion wanted to bail on our $7.25 deal? "I'm sure out clauses exist," she said, "but we can't speculate. As far as specific rules for a utility, that's really on a case-by-case basis . . . People breach contracts every day."
How very reassuring.
Nonetheless, watchdog Meissner says Dominion's deal may still be good -- this month. Under deregulation, he notes, "We're going to get screwed on all of this." But if Dominion's price isn't really guaranteed, at least it allows customers to drop the program at any time, without penalty.
"You're not going to save much on this, but you have to avoid being hurt," he says. "I'm afraid you're going to have to look at this every month. You can't simply make a deal that's going to be good for a couple years. You might have to make several switches in a year. They're not thinking on the side of the customer."