Maplewood Township Addresses Direct Energy Billing Error for Local Customers

by The Village Green
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From Maplewood Township, NJ:



It has recently come to the Township’s attention that Direct Energy, the selected electric supplier for the Sustainable Essex Alliance (SEA) program, mistakenly enrolled many Maplewood residents under a ‘budget billing plan.’  The Township has been working with Direct Energy to rectify the situation, and provides the following information for affected residents:

Q: Why does it read Payment Plan on my PSE&G bill?

A: As part of the Sustainable Essex Alliance program implemented by the Township along with a consortium of other Essex municipalities, eligible residential customers were enrolled with Direct Energy. Direct Energy was required under its contract with the Township to provide a budget bill plan (i.e. equal monthly payments for supply) to those residents who were already on a budget bill plan with PSE&G. All other participating residents were to be enrolled under the normal ‘pay-as-you-go’ method where your charges for the power supply portion of your bill are derived by multiplying your actual electricity usage for the month times the contract price. Unfortunately, during the enrollment process, the supplier made a mistake and enrolled all participating Maplewood customers under an equalized payment plan.  Under a budget plan, the supplier used your past 12 months of usage to derive an ‘average’ monthly electricity consumption, and set an even payment each month based upon that ‘average month.

Q: What is a payment plan true-up balance?

A: The payment plan balance displayed on your bill indicates how much you have paid relative to the value of the electricity that you have used. For example, if you were budgeted $50 for 3 months, but used $200 worth of electricity over the course of that same 3 months, your balance would be $50. ($200 -3x$50).  The typical pattern is for a balance to build-up during summer months when usage is typically higher than average and therefore under a budget plan you pay for less than what you actually use, and for this balance to gradually reduced in subsequent months as actual electricity usage declines.

Q: Will I pay more because of the budget plan?

A: No. All customers on a Payment Plan ultimately pay for the difference between the value of the metered electricity during the term of the plan and the sum of the levelized monthly installments paid. Ultimately, whether a customer chooses a ‘pay as you go’ option or a payment plan, over time the amount ultimately paid to the utility will be the same.

Q: What if I Pay for More Than I Use?

A: Customers who pay for more than they use will be credited back for the full value of their electricity.

What’s Next?

The Township has instructed Direct Energy to send a letter to each affected residential customer in Maplewood, describing the error and providing you with your current budget bill ‘true-up balance.  That letter should arrive before the end of December.  There are two versions of the letter: the first is for customers that still have a positive true-up balance (i.e. customer who has so far used more electricity than what has been paid for), and the second version is for customers that have a credit balance (Direct Energy owes you money).

For those residents that still have a balance owed, Direct Energy will keep you on the budget plan, so the remaining outstanding true-up balance can continue to be worked off.  However, you have the option, if you wish, of having Direct Energy convert you back to ‘pay-as-you-go’ billing immediately and settling up for the outstanding balance through a one-time charge. Customers who wish to pursue this option may do so by calling Direct Energy at 1-866-968-8065.

For those residents that have a credit balance, Direct Energy will immediately convert you back to ‘pay-as-you-go’ billing and provide you with a one-time credit on your next bill to reflect the balance that they owe you.

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