News

Safeguarding Your Organization from "Slamming"

There are numerous benefits to energy deregulation and procurement: negotiating lower prices for electricity and natural gas, peace of mind provided with minimized budgetary risk, and a worry-free fixed all-inclusive pricing, to name a few. Despite these benefits, there are still issues that can arise when you’re not paying close enough attention to your supply contract. One example is slamming, which is when an active supply agreement is trumped by a new supply agreement. What’s more, slamming can occur without the consumer’s knowledge. For a consumer already under a supply agreement, this effectively terminates the existing supply contract and can trigger early termination fees, along with other issues. We’ll start with a few scenarios that you could easily find your own organization falling into:

Client Stories: Slamming

Wholesaler

“I handed over my electricity bill to a man who visited my office and claimed to represent my local utility company,” said the President of a wholesale florist’s business. “He offered to evaluate my electricity bill as a complimentary service.”

A few weeks later, the business owner’s electricity supplier unexpectedly dropped his account from the supply contract. “Without my consent or knowledge, the man had obtained my account number from my bills and canceled my electricity supply contract for my business. I was faced with hefty termination fees because I still had many months left on my supply agreement.”

The business owner reached out to APPI Energy for assistance.  APPI Energy was able to work with the business owner’s supplier to re-enroll his account and reinstate his electricity supply contract, ultimately saving the business thousands of dollars in early termination fees. 

Auto Dealership

The owner of an automobile dealership located near Pittsburgh, Pennsylvania, became a victim of slamming after she authorized a 10% discount on her locked-in fixed price. “I received a call offering a 10% discount on my locked-in fixed price supply agreement.  The caller assured me that he wouldn’t jeopardize my current contract, and I reluctantly agreed.”

Soon afterward, she learned that her supplier dropped her dealership’s account and would charge early termination fees. “I attempted to contact the salesperson that misled me, and he was unreachable. Fortunately, APPI Energy worked with my supplier to re-enroll my account without termination fees or a gap in service penalty.”

What to Expect: Fees & Penalties

Many suppliers will charge an early termination fee to a customer that cancels a contract before the expiration date. Each supplier contract is unique in how they assess penalties. Some supplier contracts will include an early termination clause that charges a specific penalty amount per meter, while other suppliers use a calculation based on the contract’s remaining term length and usage. A gap in service penalty can occur when a customer’s supply contract is terminated before its expiration date and then re-enrolled.

Best Practices to Prevent Slamming

  1. Protect your energy bills, account numbers, and related information as you would treat any confidential business information.
  2. Beware of an energy salesperson that claims to represent the electric utility. Anyone who works for the electric utility already has digital access to all your account information.
  3. Make your employees aware of misleading callers. Even employees that are not authorized to discuss your utility bills or make contract decisions can be tricked into providing confidential information.
  4. Request to be removed from their call list.

The Bottom Line

Key takeaway: choose an energy consultant that you trust.

At APPI Energy, you’ll often hear us tout our 25 years in the industry, and for good reason. We’ve seen the good, the bad and the ugly in that 25 years, and are fully aware of the ways organizations can be misled, purposefully or not. In addition to being a trusted, well-known name in the field with the endorsement of 160+ associations and chambers of commerce, the APPI Energy Customer Service team is equipped to handle any issues or concerns that your organization runs into, including slamming. If this happens to you, our Customer Service team can often help you avoid early termination fees and re-enroll dropped accounts without penalties or disruptions to your service. When we say we are here as a true extension of your team, we mean it. Contact our team today to learn more about how APPI Energy can bring your organization peace of mind when it comes to their energy supply contracts.