I've Been Mugged Blog

The Obscure Charges That Utility Companies Add to Your Bills

[Editor's note: today's guest post by reporters at ProPublica explores billing practices within the utility industry. Everyone uses electricity, so these new billing practices can negatively impact all consumers. The post is reprinted with permission.]

By Talia Buford, ProPublica

New Jersey was reeling from the Great Recession, and Gov. Jon S. Corzine had a plan. Infrastructure projects, he decided, would help the state shake off the country’s worst economic downturn in generations. In April 2009, the state utility regulator approved nearly $1 billion in projects to install energy-efficient streetlights and replace aging gas lines, and in the process create thousands of jobs across the state.

Utilities wouldn’t have to worry about the cost. Instead of tapping their annual budgets, they were given the green light to impose a surcharge on the gas and electric bills of every customer in the state.

Up till then, such surcharges had been rare, used, for example, in the 1970s when Arab oil-producing countries placed restrictions on exports to countries such as the United States that supported Israel, driving the price of oil to quadruple. Surcharges were used to provide utilities some relief from the volatile oil price swings. But instead of being a one-off, the surcharge championed by the Corzine administration a decade ago helped usher in a new era in the economics of energy.

Across the nation, local and state governments have turned to utilities to address acute and pervasive infrastructure needs, while utility companies have looked to surcharges as a way to finance those projects — and ensure steady profits. Sometimes, utilities have used revenue from surcharges to pay for things other than infrastructure, many of which customers might expect are already included in their rates: tree trimming (Kansas), smart meters (Colorado) and pension costs (Massachusetts).

In New Jersey, gas and electric bills are packed with add-ons that pay for everything from installing solar panels to putting substations on platforms above flood levels. For residential customers, a single charge, added to bills in increments as tiny as a thousandth of a cent per kilowatt hour, can add $35 to $45 a year to costs; for industrial and commercial customers, the charges can add up to tens of thousands of dollars annually. And it’s all on top of the price that regulators have agreed customers should pay for their electricity service.

The use of surcharges has proliferated over the last decade as the energy landscape has changed substantially. The price of oil and gas has dropped as domestic supplies have increased, and residential energy use has plummeted as appliances and lighting have become more efficient. Still, the national average price of electricity has increased slightly over the last decade, with additional surcharges counteracting any potential savings. That means at the end of the day, many customers have likely noticed little, if any change in their final bills.

That remains true in New Jersey, where residential bills last year averaged about $106.28 per month, according to the federal Energy Information Administration. Garden State residents consume less energy than residents of almost all other states, but they have the 12th highest price per kilowatt hour in the nation, at about 15 cents in 2018. Some critics say surcharges have made energy costs more opaque and made it harder for customers to know enough about what they’re paying for to push back.

“Some of these costs might be for important projects and initiatives,” said Evelyn Liebman, advocacy director for AARP New Jersey. “But the question is: How do you evaluate whether or not the price that you’re asking people to pay is fair and that the benefits outweigh the costs?”

To see how surcharges have affected electricity bills, ProPublica examined the charges assessed over the last decade by PSE&G, the utility arm of New Jersey’s largest energy company, PSEG. For PSE&G, adding surcharges has proved to be easier for financing projects than raising rates on its 2.2 million electric customers. The state Board of Public Utilities, which approves rate increases, has to approve surcharges, too, but the waiting period between when the utility spends the money and when it recovers it from customer bills is shorter.

PSE&G went eight years before seeking its most recent rate increase — a lengthy, rigorous process intended to ensure that utilities are reasonable in their charges and prudent in their spending. By October 2018, when its most recent “rate case” was completed, the number of surcharges on PSE&G customer bills had grown to 14, from five in 2009. (Of those, three charges are included in the “societal benefits” charge paid by every utility customer in the state and were created by legislation.)

This year, PSE&G has added two more surcharges to customer bills, bringing the current total to 16. Most notably, one surcharge, the Zero Emissions Certificate Recovery Charge, raises $300 million to prop up PSE&G’s three nuclear power plants. That charge applies to all New Jersey customers, regardless of who supplies their power.

Nationally, the average price of electricity has slightly increased over the last decade, according to data from the Energy Information Administration. But PSE&G said that over the last decade, its customer bills have decreased even with the surcharges, which have financed investments in solar power, energy efficiency and infrastructure upgrades.

The company said the spending has helped keep electricity service reliable, created jobs and reduced emissions. “Programs have costs,” Scott S. Jennings, a PSEG senior vice president, said in an interview. “We totally recognize that. But customers are paying far less than was paid in the past.”

PSE&G said the median monthly bill for customers who only receive electricity was $102 in 2019, down slightly from 2008 when it was $105. The median bill for customers who receive electricity and gas dropped to $176 per month in 2019 from $249 in 2008. Some of those savings can be attributed to lower fuel costs.

“We see that as a win for customers, the economy and the environment,” PSE&G said in a statement.

No federal entity tracks utility surcharges nationwide, but they have been followed for years by consumer advocates and regulatory groups. The National Regulatory Research Institute, the research arm of the association for utility regulators, has cautioned states to consider the potential impacts of surcharges before approving them, with a 2009 paper recommending that the fees be approved “only in special situations.” A review of the fees conducted for the AARP in 2012 found that at least 30 states add surcharges to customer bills for an array of purposes.

In New Jersey, the BPU energy director, Stacy Peterson, said the infrastructure work financed through surcharges needs to be done. Surcharges allow work to be completed more quickly, she said, and the BPU ensures the surcharge revenue is spent properly.

“We always have the ability to step in,” she said. “We’re not just approving these blindly.”

But some critics say utility regulators have lost sight of their mission when it comes to approving surcharges, particularly for what amount to routine business costs.

Regulators “need to remember that the public interest does not mean serving the utilities,” said David Nickel, state consumer counsel in Kansas. “It means serving the public. And sometimes that means looking at the utility and telling them ‘no.’”

Chances are, you give little thought to how your electricity bill is calculated. Surcharges capitalize on that.

“I don’t half look,” said Michael Denning, a 66-year-old retiree from Kearny, New Jersey, who had come to a PSE&G customer service center in Newark on a recent Friday to pay his bill. “They’re on there, but you can’t do anything.”

Other customers said they had not seen the charges and, when approached by a reporter, spent a few minutes shuffling through their bills to decipher what was what.

Each cycle, electricity bills are broken up into two buckets: supply and delivery. Supply charges cover the cost of producing power at a plant or buying it from another producer. Delivery charges cover the cost of bringing that power over transmission lines and ultimately to your light switch. Surcharges — also known in the industry as “trackers” or “clauses” — are included in the delivery bucket and are usually assessed as a fee per kilowatt hour of electricity used.

For a utility, how it seeks to recover expenses comes down to risk.

If a utility chooses to apply for a rate increase, regulators will weigh not only the costs the utility projects for the coming years but also any expenses the utility has made that were not part of its previous rate case. If regulators don’t think the expenses were necessary, they could reject the proposal, leaving the utility on the hook for those outlays.

Surcharges sidestep that risk. Where rate cases entail a fuller review of a utility’s operations, the analysis of a surcharge focuses on a single program. Before any money is spent, that single program is given the blessing of regulators, along with a means to collect the cost from customers up front.

In New Jersey, PSE&G has made surcharges a critical part of its business strategy. In investor materials from as early as 2009, the company notes that its regulatory strategy is to earn all authorized returns on investments and minimize regulatory lag — the time between when a change in costs for the utility is reflected in the customer’s rates.

PSE&G is allowed to earn a profit on some of its investments, and with each program announced came the promise of immediate payback. In a 2011 investor meeting presentation about future investments, the company touted its growth in the solar and energy efficiency arenas alongside receiving approval for immediate repayment through surcharges.

Fitch Ratings, one of the major credit rating agencies, raised the utility’s credit rating in 2012, increasing it one notch from BBB+ to A-, its current rating, citing New Jersey’s “constructive” regulatory environment. At the time, PSE&G had recently added a weather normalization surcharge to gas bills that helped guarantee cash flow even when customers saw a mild winter and used less energy. The BPU’s willingness to allow utilities to recover costs in a “timely manner” meant there was a predictable cash flow even in uncertain outside conditions, the credit agency said at the time.

In a 2014 presentation to industry executives and investors, the company said that it expected to use surcharges to recover 12% of the $11.3 billion invested in solar and energy efficiency programs and an infrastructure hardening program, dubbed “Energy Strong,” which targeted substations that flooded during Superstorm Sandy in 2012.

During another presentation, PSE&G said consumers ultimately wouldn’t feel the surcharge for solar and energy efficiency programs because it would replace a surcharge that was expiring of an equal amount. The move, the company noted, would “fully offset the impact to customer bills,” which wouldn’t go up. Of course, bills wouldn’t go down, either, despite lower fuel costs.

“We can debate the merits of what we should and shouldn’t do,” said Jennings of PSEG. “And different people will have different perspectives. It comes down to affordability and where you draw the line.”

Critics of the charges, however, say projects billed as protecting infrastructure from climate change or increasing reliability are less about improving service and more about ensuring profits.

“If you’re a utility and demand is flat, and you get a return on capital, how can you make a capital investment if no one is buying more electricity,” said David Dismukes, executive director of the Center for Energy Studies at Louisiana State University, who testified against PSE&G’s Energy Strong program. “You say that we need to build in ‘resiliency,’ that’s how you do it.”

PSEG projected roughly $1.6 billion in earnings for 2019. The company has also paid shareholders increasing dividends every year over the past decade.

In New Jersey, surcharges appear to have found a welcoming regulatory environment, especially as the state seeks to ensure its progressive climate policies don’t alienate businesses. It’s a balancing act the state has struggled to pull off. New Jersey has been on the cutting edge of environmental protection legislation, but such efforts were spurred in part by lax enforcement that allowed industrial pollution to do lasting harm to the state’s waterways.

For the most part, utility surcharges and the projects they finance attract only fleeting attention — an article in which residents called PSE&G’s utility pole mounted solar panels an “eyesore,” or others describing work done to help the utility recover after Superstorm Sandy.

“I don’t even pay attention,” Anthony Boone, a 48-year-old artist, said as he ran errands in Newark. “I just pay it. I guess I should be more in tune, but that’s pretty low on the totem pole.”

Some customers did start to pay attention this year after the utility’s parent company, PSEG, sought to impose the surcharge to subsidize its three aging nuclear plants. Without the subsidy, the company said it would have to close the plants, costing the state hundreds of jobs and a key source of clean energy.

Suddenly, surcharges were big news, as officials, executives and legislators sparred over PSEG’s demands and the $300 million price tag.

State experts said the plants were still relatively efficient and not in danger of closing. But a law enacted in May 2018 to compensate nuclear plants for being a cleaner energy source seemed to tie the hands of the BPU. In April, the board voted to impose the surcharge, even as some of the commissioners expressed misgivings, with one likening PSEG’s threats to extortion. The New Jersey rate counsel, Stefanie Brand, whose office advocates on behalf of customers, recently challenged the subsidy in court. In a brief filed this month, Brand said that if PSEG’s threat was all it took to secure the subsidy, then “the ratepayers of this state truly are being held captive.”

As a part of any surcharge agreement, the utility must come back to regulators at a specified point in the project and provide an accounting showing that the money is being spent as stipulated, the BPU said.

Regulators say they also review surcharges as part of a utility’s next application for a rate increase. But until a change made last year, utilities could go as long as they wanted without seeking a rate increase and undergoing the requisite review. A new rule, established by the BPU in January 2018, requires any utility with an infrastructure-related surcharge to submit to a full rate review within five years of the surcharge’s approval. (PSE&G is scheduled to file its next rate case by the end of 2023.)

“Any expense in a rate case has to be prudent,” said Paul Flanagan, executive director of the BPU. “When they’re spending money on building things, one of the issues is: ‘Is it prudent? Is it gold plated? Are they just spending money to earn money?’”

The agency can step in if it believes a charge is being misused, but it almost never does. The BPU doesn’t track such interventions, but of the roughly 1,500 matters that come before the agency annually, Flanagan said interventions have been “fairly rare.”

At core, utilities and regulators see surcharges differently.

Jennings, the PSEG executive, said surcharges help the company invest wisely, ensuring regulators support a project before any money is spent.

“We want to make sure that the other stakeholders, like BPU staff and ultimately the BPU, rate counsel and other key parties agree that it is worthwhile doing,” he said. “They will, through that process, agree that the type of work and basic program is prudent.”

However, the BPU’s Flanagan said surcharges are only a way to make sure that necessary upgrades are made quickly, and he rejected the idea that they are a tacit way for regulators to weigh in on how a company makes investments.

“The utilities run their companies,” he said. “The board doesn’t run the companies. If the utility feels the need to upgrade the system, they’re capable of doing that.”

Garden State residents pay among the highest prices per kilowatt hour in the nation for their electricity. Brand, the state-appointed advocate for customers, said she is concerned about the proliferation of surcharges.

“That kind of surcharge really should be left for extraordinary circumstances and the run-of-the-mill work the utilities should be doing through rates,” Brand said. “If they’re not making enough money to do the work, they always have the ability to come in for a rate case.”

While energy costs may not drive decisions about where to live, for big businesses, energy costs can be a significant factor in locating — or relocating — a facility.

Major commercial customers, such as chemical plants and large retailers, can buy energy from a third party or generate electricity itself, but the power still has to go through a utility’s distribution and transmission lines, which is where the surcharges are applied. That leaves them with no way to avoid the not-so-small impact of the surcharges.

“We have gotten to the point that more money is probably collected at this point through these mechanisms than through base rates,” said Steve Goldenberg, a lawyer for the New Jersey Large Energy Users Coalition, which represents retailers, manufacturers, food chains and pharmaceutical companies. “And that’s the problem.”

For the Kuehne Company, which uses electricity to manufacture industrial grade bleach at plants in New Jersey, Delaware and Connecticut, surcharges have a significant impact on the company’s bottom line.

“We live and die by energy,” said Bill Paulin, the company’s co-president, noting that electricity makes up 40% of the company’s production costs.

“Our energy costs are in the millions,” he said. “We spend more on electricity than we do on medical insurance for our employees.”

The company, which employs 150 people across its three locations, has been in New Jersey since 1919, and it recently built a new manufacturing facility in Kearny, on the industrial peninsula between Newark and Jersey City. Paulin said the company made the decision to stay because of New Jersey’s access to the Northeast markets, and because of the employees who live in the state.

“We decided to take a chance and do what we needed to do to stay,” Paulin said. Still, the new facility, which was built on the site of the company’s older plant, can be dismantled and moved if costs — such as utility bills — continue to rise, he said.

“It wouldn’t be easy or cheap, but we can do it if things get out of whack.”

For now, the bills are holding steady, and not by accident.

A surcharge, imposed five years ago to cover improvements to the utility’s resilience after Hurricane Irene and Superstorm Sandy, was expiring. The program, which collected on average about $4 a month from residential customers and substantially more from commercial customers, would soon be history.

But PSE&G had already asked to impose a new surcharge, which would raise $1.5 billion to elevate or close old substations in flood zones. It would be part of Energy Strong II — an extension of the Sandy recovery program.

During discussions with the BPU and rate counsel this summer, PSE&G scaled back its proposal, and in September, the BPU approved the next phase of the program. The cost to residential customers will be about $3 each month — almost the same amount as the expiring surcharge for the previous round of the recovery program.

For more coverage, read ProPublica’s previous reporting on the environment.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Vancouver, Canada Welcomed The 'Tesla Of The Cruise Industry." Ports In France Consider Bans For Certain Cruise Ships

For drivers concerned about the environment and pollution, the automobile industry has offered hybrids (which run on gasoline, and electric battery power) and completely electric vehicles (solely on electric battery power). The same technology trend is underway within the cruise industry.

On September 26, the Port of Vancouver welcomed the MS Roald Amundsen. Some call this cruise ship the "Tesla of the cruise industry." The International Business Times explained:

"MS Roald Amundsen can be called Tesla of the cruise industry as it is similar to the electrically powered Tesla car that set off a revolution in the auto sector by running on batteries... The state of the art ship was unveiled earlier this year by Scandinavian cruise operator Hurtigruten. The cruise ship is one of the most sustainable cruise vessels with the distinction of being one of the two hybrid-electric cruise ships in the world. MS Roald Amundsen utilizes hybrid technology to save fuel and reduce carbon dioxide emissions by 20 percent."

With 15 cruise ships, Hurtigruten offers sailings to Norway, Iceland, Alaska, Arctic, Antarctica, Europe, South America, and more. Named after the first man to cross Antarctica and reach the South Pole, the MS Roald Amundsen carries about 530 passengers.

While some cruise ships already use onboard solar panels to reduce fuel consumption, this is the first hybrid-electric cruise ship. It is an important step forward to prove that large ships can be powered in this manner.

Several ships in Royal Caribbean Cruise Line's fleet, including the Oasis of the Seas, have been outfitted with solar panels. The image on the right provides a view of  the solar panels on the Celebrity Solstice cruise ship, while it was docked in Auckland, New Zealand in March, 2019. The panels are small and let sunlight through.

The Vancouver Is Awesome site explained why the city gave the MS Roald Amundsen special attention:

"... the Vancouver Fraser Port Authority, the federal agency responsible for the stewardship of the port, has set its vision to be the world’s most sustainable port. As a part of this vision, the port authority works to ensure the highest level of environmental protection is met in and around the Port of Vancouver. This commitment resulted in the port authority being the first in Canada and third in the world to offer shore power, an emissions-reducing initiative, for cruise ships. That said, a shared commitment to sustainability isn’t the only thing Hurtigruten has in common with our awesome city... The hybrid-electric battery used in the MS Roald Amundsen was created by Vancouver company, Corvus Energy."

Reportedly, the MS Roald Amundsen can operate for brief periods of time only on battery power, resulting in zero fuel usage and zero emissions. The Port of Vancouver's website explains its Approach to Sustainability policy:

"We are on a journey to meet our vision to become the world’s most sustainable port. In 2010 we embarked on a two-year scenario planning process with stakeholders called Port 2050, to improve our understanding of what the region may look like in the future... We believe a sustainable port delivers economic prosperity through trade, maintains a healthy environment, and enables thriving communities, through meaningful dialogue, shared aspirations and collective accountability. Our definition of sustainability includes 10 areas of focus and 22 statements of success..."

I encourage everyone to read the Port of Vancouver's 22 statements of success for a healthy environment and sustainable port. Selected statements from that list:

"Healthy ecosystems:
8) Takes a holistic approach to protecting and improving air, land and water quality to promote biodiversity and human health
9) Champions coordinated management programs to protect habitats and species. Climate action
10) Is a leader among ports in energy conservation and alternative energy to minimize greenhouse gas emissions..."

"Responsible practices:
12) Improves the environmental, social and economic performance of infrastructure through design, construction and operational practices
13) Supports responsible practices throughout the global supply chain..."

"Aboriginal relationships:
18) Respects First Nations’ traditional territories and value traditional knowledge
19) Embraces and celebrates Aboriginal culture and history
20) Understands and considers contemporary interests and aspirations..."

In separate but related news, government officials in the French Riviera city of Cannes are considering a ban of cruise ships to curb pollution. The Travel Pulse site reported:

"The ban would apply to passenger vessels that do not meet a 0.1 percent sulfur cap in their fuel emissions. Any cruise ship that attempted to enter the port that did not meet the higher standards would be turned away without allowing passengers to disembark."

During 2018, about 370,000 cruise ship passengers visited Cannes, making it the fourth busiest port in France. Officials are concerned about pollution. Other European ports are considering similar bans:

"Another French city, Saint-Raphael, has also instituted similar rules to curb the pollution of the water and air around the city. Other European ports such as Santorini and Venice have also cited cruise ships as a significant cause of over-tourism across the region."

If you live and/or work in a port city, it seems worthwhile to ask your local government or port authority what it is doing about sustainability and pollution. The video below explains some of the features in this new "expedition ship" with itineraries and activities that focus upon science:

Video courtesy of Hurtigruten

[Editor's note: this post was updated to include a photo of solar panels on the Celebrity Solstice cruise ship.]

Fracking Companies Lost on Trespassing, but a Court Just Gave Them a Different Win

[Editor's note: today's guest post by ProPublica discusses business practices within the fracking industry. It is reprinted with permission.]

By Ken Ward Jr., The Charleston Gazette-Mail

A week after the West Virginia Supreme Court unanimously upheld the property rights of landowners battling one natural gas giant, the same court tossed out a challenge filed by another group of landowners against a different natural gas company.

In the latest case, decided earlier this month, the court upheld a lower court ruling that threw out a collection of lawsuits alleging dust, traffic and noise from gas operations were creating a nuisance for nearby landowners.

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said the latest ruling lets “Wall Street know capital investment in oil and natural gas is welcome in West Virginia” and increases the possibility of more such investments in drilling and in so-called “downstream” chemical and manufacturing plants related to the gas industry.

In the property rights case last week, the justices set a clear legal standard that natural gas companies can’t trespass on a person’s land, without permission, to tap into gas reserves from neighboring tracts. In Monday’s case, the justices didn’t articulate a new legal precedent.

The mixed messages of the two cases show that “this is new litigation and the theories are evolving,” said Anthony Majestro, a lawyer who represented residents who lost their nuisance action before the Supreme Court.

“As the Marcellus shale drilling has expanded, there have been conflicts between surface owners and the companies that are drilling,” Majestro said. “Absent some legal requirement to require the industry to be good neighbors, I’m afraid we’ll continue to have these situations.”

Majestro’s clients were a group of residents in the Cherry Camp area of Harrison County, in north-central West Virginia. They wanted Antero Resources, the state’s largest gas company, to compensate them for unbearable traffic, “constant dust” that hangs in the air and settles on homes and vehicles, disruptive heavy equipment noise and bright lights that shine into their homes day and night.

The case focused on two dozen wells and a compressor station on six pads. The plaintiffs argued that their lives were being interfered with by Antero’s production of gas from beneath their property, even though the wells were on neighboring land, not on their own properties.

Across West Virginia’s gas-producing region, many residents own the surface of the land where they live, but don’t hold the minerals located beneath. Often, rights to the natural gas were signed over decades ago, long before drilling and gas production of the size and scope now conducted was even dreamed of.

The two court cases were featured last year as part of a series of stories by the Gazette-Mail and ProPublica that explored the impacts of the growth of natural gas on West Virginia communities.

In some ways, the Antero case was more complex than the earlier matter, in which the state court ruled clearly for Doddridge County residents Beth Crowder and David Wentz in their dispute with EQT Corp., West Virginia’s second-largest gas producer.

EQT had built a well pad and pipelines on Crowder and Wentz’s property to reach natural gas not located beneath their farm, but under neighboring tracts, including some that were thousands of feet away. Modern natural gas drilling uses horizontal drilling to use smaller numbers of larger wells to reach much greater amounts of gas.

Justice John Hutchison wrote the court’s 5-0 decision against EQT, including a new point of law that sets a precedent that calls what the company did trespassing and forbids it from being done in the future.

The ruling in the Antero case was a split, 3-2 decision, and the opinion by Justice Evan Jenkins included no new points of law setting precedent for future cases.

Instead, his opinion was based on the view that Antero had gas leases that created a right for it to do whatever was “reasonably necessary” to get at its mineral holdings.

Antero spokeswoman Stephanie Iaquinta said, “We appreciate the court’s thorough review of this important matter and its decision.”

Chief Justice Beth Walker wrote a concurring opinion, pointing out that the majority decision wasn’t necessarily getting to the heart of the matter: whether the kinds of gas industry impacts complained about by the Harrison County residents constitute a legal nuisance.

And Justice Margaret Workman wrote a strongly worded dissent, saying that the court had not only ducked the central legal issue in the case, but that it had usurped the authority of a jury to decide if the facts of how Antero operates should be deemed to be “reasonably necessary” to produce natural gas.

“For a century, the tenor of our mineral easement case law, in each temporal and technological ideation, has been that there must be a balance of the rights of surface owners and mineral owners,” Workman wrote. “Rather than making any attempt to establish legal guidance for that goal in this new context, the majority endorses a gross inequity that effectively gives this new industrialization carte blanche to operate without any regard for the rights of those who live on the land.”

Filed under:

• Environment
• Regulation

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Court to Big Fracking Company: Trespassing Still Exists — Even For You

[Editor's note: today's guest post by ProPublica discusses business practices within the fracking industry. It is reprinted with permission. Readers may also be interested in this blog post from February.]

By Kate Mishkin and Ken Ward Jr., The Charleston Gazette-Mail

Seven years ago this month, Beth Crowder and David Wentz told natural gas giant EQT Corp. that it did not have permission to come onto their West Virginia farm to drill for the natural gas beneath neighboring properties.

EQT had a lease that entitled the company to the gas directly beneath their farm, but it also wanted to use a new, 20-acre well pad to gather gas from 3,000 acres of adjacent or nearby leases. The company ignored their warnings. It built roads and drilled a well, and it put in horizontal pipes stretching for miles in all directions.

Crowder and Wentz sued — and they’ve been fighting EQT in court ever since. On Wednesday, the West Virginia Supreme Court ended the matter with a surprisingly straightforward and unanimous conclusion: Going onto someone else’s land without their permission is trespassing.

Gas and other mineral companies must obtain permission from surface owners in order to use their land to reach reserves under other properties, Justice John Hutchison wrote for the court. "The right must be expressly obtained, addressed, or reserved in the parties’ deeds, leases, or other writings," he wrote.

Attorney Dave McMahon, who represented Crowder and Wentz, broke the news to them by phone. "The short answer is, we won. And we won big time," he said.

On the other end of the line in Doddridge County, Crowder and Wentz shouted and laughed. "I think I’m feeling kind of numb," Crowder said. "I’ve been used to being in limbo forever."

Kristina Whiteaker, another lawyer for Crowder and Wentz, told them, "You guys really made some good law for the whole state."

EQT said in a statement issued Thursday afternoon that the company was "disappointed in the court’s ruling” but didn’t “expect the decision to have a significant impact on our operations in West Virginia."

"We intend to maintain cooperative and mutually beneficial relationships with our customers, our partners, and residents in the regions where we do business," EQT said.

The West Virginia Oil and Natural Gas Association, an industry trade association, said it is analyzing the ruling to determine how it may impact its member companies.

In a statement, Charlie Burd, the executive director of the Independent Oil and Gas Association of West Virginia, said the industry group would have preferred a ruling that encouraged horizontal drilling, but planned to comply with it. “IOGAWV members like to have good relationships with property owners,” Burd said.

Crowder and Wentz’s saga was chronicled last year by the Gazette-Mail and ProPublica, in an investigation that detailed how the natural gas industry had gained an upper hand on the state’s residents.

The 22-page court ruling Wednesday represents a rare victory for residents in a state where economics and politics are increasingly controlled by the natural gas business after decades of domination by the coal industry. Making it more gratifying for Crowder and Wentz, the court that ruled in their favor has been under the microscope because of connections to the gas industry.

Much of the land in mineral-producing parts of West Virginia has split ownership. Someone might own the surface land, while someone else owns the coal, oil or gas underneath. Gas is generally produced under leases, in which gas owners or their ancestors granted a production company the right to drill. But often, the leases are so old the current owners didn’t sign them, and certainly the advanced types of gas-production techniques used today were not anticipated.

Compounding the matter, gas producers now use a process called hydraulic fracturing, which pumps huge amounts of water and chemicals underground to loosen up gas reserves, and drill extensive horizontal holes to suck in gas from much wider areas. They bring in fleets of heavy trucks and install tanks and pipelines. The entire process has brought an influx of vibrations, noise and traffic. Though bills have been introduced year after year that are designed to mitigate the impacts on residents, West Virginia lawmakers have repeatedly refused to act.

Crowder and Wentz moved to their 300-acre farm on Brush Run in 1975, part of the “back-to-the-land” movement, seeking to live simply and be left alone. They divorced in 2005 and split the land, but both still live there on separate tracts.

There had been small gas wells on the property for years, but they were nothing like the noise, traffic and disturbance that EQT brought with it when it drilled nine new wells that would take in gas through nearly 10 miles of underground bores.

In February 2016, a local judge ruled that EQT had trespassed, and in September 2017, a jury awarded Crowder and Wentz about $200,000 in damages. EQT appealed.

The case is one of two major gas property-rights and drilling cases this term in which the industry is pressing for rulings that support its current method and scope of operations.

In the other case heard before the West Virginia Supreme Court in January, Harrison County residents said Antero Resources’ operations were creating a nuisance. A ruling on that hasn’t been issued yet.

At the heart of these cases is the fact that, economically and technologically, gas production today is all about what industry officials call “laterals.” These horizontal holes are drilled out in all directions from a vertical well. They can pull in natural gas from several miles away.

Industry officials say horizontal drilling allows them to minimize environmental impacts by building one well pad for multiple wells. But in doing so, it has magnified the impact for those residents who happen to live near — or on — the tracts chosen for those pads.

The Independent Oil and Gas Association had warned in a court brief that a ruling against EQT in the case would have “significant negative implications upon future and existing natural gas development in West Virginia.” EQT lawyers made similar warnings at trial.

Joshua Fershee, a West Virginia University law professor who has followed the case, said that the court’s decision won’t stop gas drilling. It will, however, make it more expensive for companies to secure the needed rights.

In concluding the court’s opinion, Hutchison said the justices didn’t aim to “challenge or constrain the drilling methods chosen by the oil and gas industry.”

“The industry has shown that horizontal drilling and hydraulic fracturing techniques are evolving at a rapid pace and are an economical and efficient tool for producing hydrocarbons,” Hutchison wrote. “Our opinion only affirms a classical rule of property jurisprudence: it is trespassing to go on someone’s land without the right to do so.”

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• Environment

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Large Natural Gas Producer to Pay West Virginia Plaintiffs $53.5 Million to Settle Royalty Dispute

[Editor's note: today's guest post by ProPublica discusses business practices within the energy industry. It is reprinted with permission.]

By Kate Mishkin and Ken Ward Jr., The Charleston Gazette-Mail

The second-largest natural gas producer in West Virginia will pay $53.5 million to settle a lawsuit that alleged the company was cheating thousands of state residents and businesses by shorting them on gas royalty payments, according to terms of the deal unsealed in court this week.

Pittsburgh-based EQT Corp. agreed to pay the money to end a federal class-action lawsuit, brought on behalf of about 9,000 people, which alleged that EQT wrongly deducted a variety of unacceptable charges from peoples’ royalty checks.

The deal is the latest in a series of settlements in cases that accused natural gas companies of engaging in such maneuvers to pocket a larger share of the profits from the boom in natural gas production in West Virginia.

This lawsuit was among the royalty cases highlighted last year in a joint examination by the Charleston Gazette-Mail and ProPublica that showed how West Virginia’s natural gas producers avoid paying royalties promised to thousands of residents and businesses. The plaintiffs said EQT was improperly deducting transporting and processing costs from their royalty payments. EQT said its royalty payment calculations were correct and fair.

A trial was scheduled to begin in November but was canceled after the parties reached the tentative settlement. Details of the settlement were unsealed earlier this month.

Under the settlement agreement, EQT Production Co. will pay the $53.5 million into a settlement fund. The company will also stop deducting those post-production costs from royalty payments.

“This was an opportunity to turn over a new leaf in our relationship with our West Virginia leaseholders and this mutually beneficial agreement demonstrates our renewed commitment to the state of West Virginia,” EQT’s CEO, Robert McNally, said in a prepared statement.

EQT is working to earn the trust of West Virginians and community leaders, he said.

Marvin Masters, the lead lawyer for the plaintiffs, called the settlement “encouraging” after six years of litigation. (Masters is among a group of investors who bought the Charleston Gazette-Mail last year.)

Funds will be distributed to people who leased the rights to natural gas beneath their land in West Virginia to EQT between Dec. 8, 2009, and Dec. 31, 2017. EQT will also pay up to $2 million in administrative fees to distribute the settlement.

Settlement payments will be calculated based on such factors as the amount of gas produced and sold from each well, as well as how much was deducted from royalty payments. The number of people who submit claims could also affect settlement payments. Each member of the class that submits a claim will receive a minimum payment of at least $200. The settlement allows lawyers to collect up to one-third of the settlement, or roughly $18 million, subject to approval from the court.

The settlement is pending before U.S. District Judge John Preston Bailey in the Northern District of West Virginia. The judge gave it preliminary approval on February 11th, which begins a process for public notice of the terms and a fairness hearing July 11 in Wheeling, West Virginia. Payments would not be made until that process is complete.

Filed under:

• Environment

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Security Researcher Warns 'Hack A Smart Meter And Kill The Grid'

Everyone has utility meters which measure their gas and/or electricity consumption. Many of those meters are smart meters, installed in homes in both the United States and Britain. How secure are smart meters? First, some background since few consumers know what's installed in their homes.

According to the U.S. Energy Information Administration (EIA), there were 78.9 million smart meters installed in the United States by 2017, and residential installations account for 88 percent of that total. So, about half of all electricity customers in the United States use smart utility meters.

All smart meters wirelessly transmit usage to the utility provider. That's why you never see utility technicians visiting homes to manually "read" utility meters. There are two types of smart meters. In 2013, the number of two-way (AMI) smart meters in the United States exceeded the number of one-way (AMR) smart meters. The EIA explained:

"Two-way or AMI (advanced metering infrastructure) meters allow utilities and customers to interact to support smart consumption applications...The deployment and use of AMI and AMR meters vary greatly by state. Only 5 states had an AMI penetration rate above 80 percent. High penetration rates are seen in northern New England, Western states, Georgia and Texas. California added the most AMI meters of any state in 2013... There were 6 states with AMR penetration rates above 80 percent with Rhode Island the leader at 95 percent. The highest penetration rates are in the Rocky Mountain, Upper Plains and Southern Atlantic states. New York added nearly 540,000 AMR meters in 2013. Pennsylvania lost 580,000 AMR meters, but gained almost 620,000 AMI meters..."

See the chart on the right for two-way installations by state. Readers of this blog are aware of the privacy issues. A few states allow users to opt out of smart meters. Since the wireless transmissions occur throughout each month, smart meters can be used to profile consumers with a high degree of accuracy (e.g., the number of persons living in the dwelling, when you're home and the duration, which electric appliances are used, the presence of security and alarm systems, special equipment such as in-home medical equipment, etc.).

Now, back to Britain. It seems that the security of smart utility meters is questionable. Smart Grid Awareness follows the security and privacy issues associated with smart utility meters. The site reported that a British security expert:

"... is more convinced than ever that evidence now exists that rogue chips may be embedded into electronic circuit boards during the manufacturing process, such as those contained within utility smart meters. Smart meters can be considered high value targets for hackers due to the existence of the “remote disconnect” feature included as an option for most smart meters deployed today."

So, smart meters are part of the "smart power grid." If smart utility meters can be hacked, then the power grid -- and residential utility services -- can be interrupted or disabled. The remote-disconnect feature allows the utility to remotely turn off a meter. Smart meters in the United States have this feature, too. Reportedly, utilities say that they've disabled the feature. However, if the supply chain has been compromised with hacked chips (as this Bloomberg report claimed with computers), then bad actors may indeed be able to turn on and use the remote-disconnect feature in smart utility meters.

You can read for yourself the report by security researcher Nick Hunn. Clearly, there is more news to come about this. I look forward to energy providers assuring consumers how they've protected their supply chains. What do you think?

North Carolina Provides Its Residents With an Opt-out From Smart Meter Installations. Will It Last?

Wise consumers know how smart utility meters operate. Unlike conventional analog meters which must be read manually on-site by a technician from the utility, smart meters perform two-way digital communication with the service provider, have memory to digitally store a year's worth of your usage, and transmit your usage at regular intervals (e.g., every 15 minutes). Plus, consumers have little or no control over smart meters installed on their property.

There is some good news. Residents in North Carolina can say "no" to smart meter installations by their power company. The Charlotte Observer reported:

"Residents who say they suffer from acute sensitivity to radio-frequency waves can say no to Duke's smart meters — as long as they have a notarized doctor's note to attest to their rare condition. The N.C. Utilities Commission, which sets utility rates and rules, created the new standard on Friday, possibly making North Carolina the first state to limit the smart meter technology revolution by means of a medical opinion... Duke Energy's two North Carolina utility subsidiaries are in the midst of switching its 3.4 million North Carolina customers to smart meters..."

While it currently is free to opt out and get an analog meter instead, that could change:

"... Duke had proposed charging customers extra if they refused a smart meter. Duke wanted to charge an initial fee of $150 plus $11.75 a month to cover the expense of sending someone out to that customer's house to take a monthly meter reading. But the Utilities Commission opted to give the benefit of the doubt to customers with smart meter health issues until the Federal Communications Commission determines the health risks of the devices."

The Smart Grid Awareness blog contains more information about activities in North Carolina. There are privacy concerns with smart meters. Smart meters can be used to profile consumers with a high degree of accuracy and details. One can easily deduce the number of persons living in the dwelling, when they are home and the duration, which electric appliances are used when they are home, the presence of security and alarm systems, and any special conditions (e.g., in-home medical equipment, baby appliances, etc.).

Other states are considering similar measures. The Kentucky Public Service Commission (PSC) will hold a public meeting only July 9th and accept public comments about planned smart meter deployments by Kentucky Utilities Co. (KU) and Louisville Gas & Electric Company (LG&E). Smart meters are being deployed in New Jersey.

When Maryland lawmakers considered legislation to provide law enforcement with access to consumers' smart meters, the Electronic Privacy Information Center (EPIC) responded with a January 16, 2018 letter outlining the privacy concerns:

"HB 56 is a sensible and effective response to an emerging privacy issue facing Maryland residents. Smart meters collect detailed personal data about the use of utility services. With a smart meter, it is possible to determine when a person is in a residence, and what they are doing. Moreover the routine collection of this data, without adequate privacy safeguards, would enable ongoing surveillance of Maryland residents without regard to any criminal suspicion."

"HB 56 does not prevent law enforcement use of data generated by smart meters; it simply requires that law enforcement follow clear procedures, subject to judicial oversight, to access the data generated by smart meters. HB 56 is an example of a model privacy law that enables innovation while safeguarding personal privacy."

That's a worthy goal of government: balance the competing needs of the business sector to innovate while protecting consumers' privacy. Is a medical opt-out sufficient? Should Fourth Amendment constitutional concerns apply? What are your opinions?

U.S. Treasury Department Fined ExxonMobil $2 Million For Sanction Violations

On Thursday, the U.S. Department of the Treasury fined ExxonMobil Corporation $2 million for violations of sanctions while current Secretary of State Rex Tillerson was the company's Chief Executive Officer. The Office of Foreign Assets Control (OFAC) within the Treasury Department issued the fine. According to the announcement:

"Between on or about May 14, 2014 and on or about May 23, 2014, ExxonMobil violated § 589.201 of the Ukraine-Related Sanctions Regulations when the presidents of its U.S. subsidiaries dealt in services of an individual whose property and interests in property were blocked, namely, by signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft OAO, and an individual identified on OFAC’s List of Specially Designated Nationals and Blocked Persons.

OFAC determined that ExxonMobil did not voluntarily self-disclose the violations to OFAC, and that the violations constitute an egregious case."

During March of 2014, Russia officially annexed Crimea, a peninsula in the Black Sea, from Ukraine. Moscow retaliated by banning nine U.S. officials and lawmakers from entering Russia. Then, President Obama ordered more sanctions against two-dozen members of Putin's inner circle and against Bank Rossiya, the Russian bank supporting them.

During August of 2014, Russian troops invaded eastern areas of Ukraine along the country's southeast coast. Reportedly, Russian troops fought with pro-Russia rebels against Ukrainian military.

 The Treasury Department released an "Enforcement Information for July 20, 2017" document which stated in part:

"... ExxonMobil did not voluntarily self-disclose the violations to OFAC and that the violations constitute an egregious case. Both the base civil monetary penalty and the statutory maximum civil monetary penalty amounts for the violations were $2,000,000. OFAC thoroughly considered the arguments ExxonMobil set forth in its submissions to OFAC, and the penalty amount reflects OFAC's consideration of the following facts and circumstances... OFAC considered the following to be aggravating factors: (1) ExxonMobil demonstrated reckless disregard for U.S. sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services of an SDN; (2) ExxonMobil's senior-most executives knew of Sechin's status as an SDN when they dealt in the blocked services of Sechin; (3) ExxonMobil caused significant harm to the Ukraine-related sanctions program objectives by engaging the services of an SDN designated on the basis that he is an official of the Government of the Russian Federation contributing to the crisis in Ukraine; and (4) ExxonMobil is a sophisticated and experienced oil and gas company that has global operations and routinely deals in goods, services, and technology subject to U.S economic sanctions and U.S. export controls. OFAC considered the following to be a mitigating factor: ExxonMobil has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the date of the first transaction giving rise to the violation..."

It seems that OFAC would have fined ExxonMobil more if it could have. During 2016, ExxonMobil generated sales revenues of $197.52 billion and net income of $7.84 billion. So, the company can easily afford this fine.

ExxonMobil issued a press release on July 20 which denied the violations and claimed that it had received clear guidance from the Treasury Department that the transactions were legal, "so long as the activity related to Rosneft’s business and not Sechin’s personal business." The press release also cited several news sources. You'd think that the company's executive would simply have gone straight to the source, the OFAC, and bypassed intermediaries.

The OFAC Enforcement Information document debunked the energy company's claim:

"ExxonMobil claims that it interpreted press statements as establishing a distinction between Sechin's "professional" and "personal" capacity, in part citing to a news article published in April 2014 that quoted a Department of the Treasury representative as saying that a U.S. person would not be prohibited from participating in a meeting of Rosneft' s board of directors. However, that brief statement did not address the conduct in this case.

Furthermore, the plain language of the Ukraine-Related Sanctions Regulations (which were issued after the Executive branch statements) and E.O. 13661 do not contain a "personal" versus "professional" distinction, and OFAC has neither interpreted its Regulations in that manner nor endorsed such a distinction. The press release statements provided context for the policy rationale surrounding the targeted approach during the early days of the Ukraine crisis, which was to isolate designated individuals who were targeted as a result of the crisis in Ukraine, rather than imposing blocking sanctions on the large companies that they managed. No materials issued by the White House or the Department of the Treasury asserted an exception or carve-out for the professional conduct of designated or blocked persons, nor did any materials suggest that U.S. persons could continue to conduct or engage in business with such individuals.

Separately, there was a Frequently Asked Question (FAQ) publicly available on the OFAC website at the time of the violations that specifically spoke to the conduct at issue in this case..."

The Enforcement Information document is available at the Treasury Department's website and here (Adobe PDF).

While at the Treasury Department's website, I noticed that the Treasury Notes blog stopped publishing on January 19, 2017 -- about the same time as the Presidential Inauguration. What's up with that? Does the Treasury Department, under the Trump Administration, believe that it is okay not to inform citizens, taxpayers, and voters?

EPA Concludes Fracking a Threat to U.S. Water Supplies

[Editor's note: Today's guest post is by reporters at ProPublica. This new story was originally published on December 14, 2016. It is reprinted with permission.]

by Patrick G. Lee, ProPublica

Starting in 2008, ProPublica published stories that found hydraulic fracking had damaged drinking water supplies across the country. The reporting examined how fracking in some cases had dislodged methane, which then seeped into water supplies. In other instances, the reporting showed that chemicals related to oil and gas production through fracking were winding up in drinking water, and that waste water resulting from fracking operations was contaminating water sources.

Many environmentalists hailed the reporting. The gas drilling industry, for its part, pushed back, initially dismissing the accounts as anecdotal at best.

This week, the Environmental Protection Agency issued its latest and most thorough report on fracking's threat to drinking water, and its findings support ProPublica's reporting. The EPA report found evidence that fracking has contributed to drinking water contamination 2014 "cases of impact" 2014 in all stages of the process: water withdrawals for hydraulic fracturing; spills during the management of hydraulic fracturing fluids and chemicals; injection of hydraulic fracturing fluids directly into groundwater resources; discharge of inadequately treated hydraulic fracturing wastewater to surface water resources; and disposal or storage of hydraulic fracturing wastewater in unlined pits, resulting in contamination of groundwater resources.

In an interview, Amy Mall, a senior policy analyst at the National Resources Defense Council, said the EPA's report was welcome.

"Many of us have been working on this issue for many years, and industry has repeatedly said that there is no evidence that fracking has contaminated drinking water," Mall said.

The EPA report comes a year after its initial set of findings set off fierce criticism by environmental advocates and health professionals. That report, issued in 2015, said the agency had found no evidence that fracking had "led to widespread, systemic impacts on drinking water resources." Many accused the agency of pulling its punches and adding to confusion among the public. News organizations throughout the U.S. interpreted the EPA's language to mean it had concluded fracking did not pose a threat to water supplies and public health.

The EPA said in its report this week that the sentence about the lack of evidence of systemic issues had been intentionally removed because the agency's scientists had "concluded it could not be quantitatively supported."

"I think one of the concerns about the original document was that the EPA seemed to say that everything was fine," said Rob Jackson, a professor of earth-system science at Stanford University. "It's important that we understand the ways and the cases where things have gone wrong, to keep them from happening elsewhere."

The EPA's latest declaration comes as a Trump administration apparently hostile to almost any kind of regulation of fracking prepares to assume office. But those worried about fracking's implications for the environment have long been discouraged by the lack of consistent and stringent state or federal regulation.

"Because state regulators have not fully investigated cases of drinking water contamination, and because federal regulators have been handcuffed by Congress into how much they can regulate, the science wasn't as robust as it should have been," said Mall, the analyst at NRDC. "It's a pattern of, the rules are too weak, and the ones that are on the books aren't enforced enough."

The more significant impact of a Trump administration, however, may be in limiting the EPA's appetite for aggressive and continued study. The report issued this week was six years in the making, but made clear there was still much work to be done to better and more comprehensively determine fracking's impact on the environment, chiefly water supplies.

"It was not possible to calculate or estimate the national frequency of impacts on drinking water resources from activities in the hydraulic fracturing water cycle or fully characterize the severity of impacts," the report said.

The Trump administration's transition team did not immediately respond to an e-mailed request for comment about its position on fracking and the EPA's final report. Trump's transition website promises to "unleash an energy revolution" and "streamline the permitting process for all energy projects." It also says it will "refocus the EPA on its core mission of ensuring clean air, and clean, safe drinking water for all Americans."

Advocates for hydraulic fracturing argue that the final EPA report is not vastly different from the draft version.

"Anecdotal evidence about localized impacts does not disprove the central thesis, which is that there is no evidence of widespread or systemic impacts," said Scott Segal, a partner at Bracewell LLP who represents oil and gas developers. "There's a lot of exaggeration. There's a lot of mischaracterization of the extent of contamination that's based on a desire to enhance recovery in tort liability lawsuits."

Read more of ProPublica's major work on fracking.

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Oklahoma Closes 37 'Disposal Wells' After Quake. Report Listed Susceptible Areas In 6 States

During the holiday weekend, CNN reported:

"Five months before Saturday's 5.6 magnitude temblor in central Oklahoma, government scientists warned that oil and natural gas drilling had made a wide swath of the country more susceptible to earthquakes.

The U.S. Geological Survey (USGS), in a March report on "induced earthquakes," said as many as 7.9 million people in parts of Kansas, Colorado, New Mexico, Texas, Oklahoma and Arkansas now face the same earthquake risks as those in California. The report found that oil and gas drilling activity, particularly practices like hydraulic fracturing or fracking, is at issue... Saturday's earthquake spurred state regulators in Oklahoma to order 37 disposal wells, which are used by frackers, to shut down over a 725-square mile area... The quake that struck Saturday is at least the second of its size to affect central Oklahoma since 2011."

What are "disposal wells?" A variety of activities produce waste stored using "Class I Disposal Wells:" petroleum refining, metal production, chemical production, pharmaceutical production, commercial disposal, food production, and municipal wastewater treatment. According to the U.S. Environmental Protection Agency (EPA), these Class I wells are further categorized into four types: municipal, non-hazardous, hazardous, and radioactive. The EPA site also explains the other Classes of wells: II, III, IV, V, and VI.

So, a lot of industries besides fracking pump liquids into the ground -- deep into the ground; both to extract resources and to deposit waste.

Given the earthquake activity, the closed wells, and damage to business and residential properties, it seems wise to read the March 2016 report by the USGS, which discussed at the risks and potential for damage from both natural and induced earthquakes:

"The most significant hazards from induced seismicity are in six states, listed in order from highest to lowest potential hazard: Oklahoma, Kansas, Texas, Colorado, New Mexico and Arkansas. Oklahoma and Texas have the largest populations exposed to induced earthquakes."

So, that's a list you wouldn't want to see mention your state. Nor would you want to see your state at the top of the list. The USGS report included maps highlighting specific areas with risks ranging from less than one percent to a 12 percent probability. The report also stated:

“In the past five years, the USGS has documented high shaking and damage in areas of these six states, mostly from induced earthquakes... the USGS Did You Feel It? website has archived tens of thousands of reports from the public who experienced shaking in those states, including about 1,500 reports of strong shaking or damage.” In developing this new product, USGS scientists identified 21 areas with increased rates of induced seismicity. Induced earthquakes have occurred within small areas of Alabama and Ohio but a recent decrease in induced earthquake activity has resulted in a lower hazard forecast in these states for the next year. In other areas of Alabama and small parts of Mississippi, there has been an increase in activity, and scientists are still investigating whether those events were induced or natural."

Lets unpack this. First, risk varies based upon where you live. Second, risk varies with time. The USGS risk models include both one-year and 50-year outlooks. So, the risk in an area may be low during the coming year, but very different (e.g., higher) when considering what might happen during the next 50 years. That sounds a lot like floods. A huge, devastating flood may not happen often -- perhaps once every 50 or 100 years, but when it does... the damage and costs are considerable. Third, you don't need to live near or adjacent to a well to be affected.

Below is the USGS map with 21 susceptible areas:

Note the areas named: Alice, Ashtabula, Brewton, Cogdell, Dagger Draw, El Dorado, Fashbing, Greeley, Irving, North-Central Arkansas, North Texas, Oklahoma-Kansas, Paradox Valley, Perry, Raton Basio, Rangely, Rocky Mountain Arsenal, Sun City, Timpson, Venus, and Youngstown. The USGS advises persons living in areas with higher earthquake risks to learn how to prepare, and visit FEMA's Ready Campaign website.

A USGS report in 2015 titled, "6 Facts About Human-Caused Earthquakes" described the types of human activities:

"Injecting fluid underground can induce earthquakes, a fact that was established decades ago by USGS scientists. This process increases the fluid pressure within fault zones, essentially loosening the fault zones and making them more likely to fail in an earthquake... even faults that have not moved in historical times can be made to slip and cause an earthquake... There are several purposes for injecting fluid underground. The three main reasons are wastewater injection, hydraulic fracturing and enhanced oil recovery. Within the United States, each of these three activities has induced earthquakes to varying degrees in the past few years. All three types of wells used for these purposes are regulated under the Safe Drinking Water Act with minimum standards set by the U.S. Environmental Protection Agency. Additional regulations vary by state and municipality. Other purposes for injecting fluid underground include enhanced geothermal systems and geologic carbon sequestration."

That same report also mentioned this:

"Fact 5: Induced seismicity can occur at significant distances from injection wells and at different depths. Earthquakes can be induced at distances of 10 miles or more away from the injection point and at significantly greater depths than the injection point."

So, to be affected you don't have to live near or adjacent to a disposal well or injection point. Alert readers will notice that the EPA's classification system for wells and injection points largely mirrors the different types of human activities... which really seem to be mostly corporate activities.

Do you live in or near one of the 21 areas? What are your opinions?

6 Tips To Protect Yourself From Callers Offering Energy Discount Scams

Recently, I received a phone call offering "discounts on my Eversource bill." The caller identified himself as "Kevin." I have no idea if that is his real name. Kevin explained that I could get discounts by giving him some simple personal information. His then asked for my ZIP Code.

Right. I was born at night, but not last night.

I told Kevin that I don't share my personal information over the phone without knowing who the caller is. I asked him to provide four items: a) his full name, b) his company name, c) his company's phone number, and d) his company's website address.

Kevin replied, "okay." The next thing I heard was a loud click as he hung up.

Now, there are real companies offering discounts on electric utilities. Clearly, Kevin was not one of them. After receiving robocalls before from energy scammers, I have learned to demand these four data elements before sharing any personal information on the phone.

To protect yourself and your money from scam artists, Eversource advises residential customers:

"1. Always verify whether these callers are legitimate by asking for some basic information about your account. Our representatives will always be able to provide the name on the account, the account address, and the exact past due balance.

2. Never immediately pay, regardless of what the caller knows about your account. If they request an immediate payment using a third-party service, at another location or via a prepaid debit card, hang up immediately and contact us directly to verify your account status.

3. If you are suspicious, hang up and call us ​at 800-592-2000. Also, please report this to your local law enforcement.

4. Never wire money to someone you don’t know – regardless of the situation. Once you wire money, you cannot get it back.

5. Do not accept offers from anyone, including those claiming to be Eversource employees, to pay your bill or provide any other service for a fee.

6. Do not click on links or call numbers that appear in unexpected emails or text messages – especially those asking for your account information. If you click on a link, your computer could become infected with malware, including viruses that can steal your information and compromise your computer."

And, learn how to spot these five energy scams. Demanding that the caller clearly and completely identify their self also seems to work.

Learn How To Spot These 5 Energy Scams So You Don't Get Duped

Maybe it was a visit by door-to-door sales person. Maybe it was a phone call; or a text or e-mail message. There are six energy scams you should be aware of, so you don't get duped and lose your hard-earned money. Eversource, the largest energy delivery service in New England, alerted its customers about common scams:

1. Shut-off Threats: callers claim to represent the Billing or Disconnect Department, and state that your power will be shut off if you don't make a payment immediately.
2. Pay immediately: callers instruct you to make a payment immediately to a third-party location, such as a grocery store, or to a "Green Dot" VISA card. Then, the scammer directs victims to call another phone number to report the card payment information, so the scammers can drain the card account online.
3. Faulty meters: callers claim your electric (or gas) meter is broken and it overcharging you. Then, the scammer directs victims to buy a $200.00 prepaid card. The scammers calls again claiming the first payment hasn't posted, and the consumer should buy a $300.00 prepaid card. Of course, the scammer lies about the meter being fixed soon.
4. Unsolicited technician: a door-to-door person, with a hard-to-read badge, claims he is there to check your usage since your neighbors reported have claimed about high monthly bills.
5. Unsolicited salesperson: a door-to-door person claims there is a problem with your utilities, and you failed to respond to urgent notices. The scammers insisted that you could get a rebate, or savings, but needs to see a copy of your energy bill.

These are all scams because:

"Eversource would never ask you to purchase prepaid cards or make an immediate payment at a third-party location, like a grocery store. We have a very secure, protected billing system, and you have multiple, convenient options to pay your bills, including direct debit, check, credit card and cash. Customers who are scheduled for disconnection due to nonpayment receive written notice that includes the actions they can take to maintain service... All [Eversource] employees carry company-issued identification, and any electrical contractors working with us carry documentation explaining the nature and location of their work. Customers can always call us to verify this information. Eversource would never solicit door-to-door or over the phone on behalf of a specific competitive/alternate energy supplier."

The information on your monthly energy bill is sensitive information. Protect it. Eversource advises:

"Never provide personal financial or utility account information to any unsolicited individual, in person, on the phone, or online, even if the individual seems legitimate."

And Eversource advises its consumers to:

"Always verify whether these contacts are legitimate by asking for some basic information about your account. Our representatives will always be able to provide the name on the account, the account address, and the exact past due balance. If the caller cannot provide that information, the call is not from us."

If you use a different energy provider, check it's website for scams. For example, earlier this month PG&E warned its customers in California about similar scams.

I've received some of these robocalls from scammers. Long ago, I registered both my landline and mobile phone numbers in the National Do Not Call Registry. When I receive unwanted and un-requested robocalls, I hang up the call immediately and submit a complaint to the U.S. Federal Trade Commission (FTC). You should, too.

ExxonMobil CEO Sues To Stop Fracking Near His Mansion

This news story highlights corporate executive hypocrisy. The Nation reported that Rex Tillerson, the Chief Executive Officer (CEO) at ExxonMobil, has sued to stop fracking activities near his mansion:

"... Tillerson, a vocal proponent of hydraulic fracking, who is suing to prevent the construction of a water tower near his eighty-three-acre, $5 million horse ranch in Bartonville, Texas. The purpose of the tower? Storing water for fracking. Tillerson and his super-wealthy neighbors are concerned, the lawsuit states, that the fracking tower might “devalue their properties..."

By implication, this means it is better to locate fracking activities in or near neighborhoods of poor and middle-income people. They won't mind, right?

Is Mr. Tillerson's hypocritical actions atypical at ExxonMobil? I think not. Why? It's important to remember history. The Guardian UK reported in July 2015:

"ExxonMobil, the world’s biggest oil company, knew as early as 1981 of climate change – seven years before it became a public issue, according to a newly discovered email from one of the firm’s own scientists. Despite this the firm spent millions over the next 27 years to promote climate denial. The email from Exxon’s in-house climate expert provides evidence the company was aware of the connection between fossil fuels and climate change, and the potential for carbon-cutting regulations that could hurt its bottom line, over a generation ago... Exxon’s public position was marked by continued refusal to acknowledge the dangers of climate change, even in response to appeals from the Rockefellers, its founding family... Over the years, Exxon spent more than $30m on think tanks and researchers that promoted climate denial, according to Greenpeace. Exxon said on Wednesday that it now acknowledges the risk of climate change and does not fund climate change denial groups."

What are your opinions?

Views Of Climate Change

Learn more: global attitudes toward climate change, opinions by adults in the USA, and what is considered settled climate change science.

FTC Report Recommended Best Practices For Companies Offering Products For The Internet of Things

Earlier this year, the U.S. Federal Trade Commission (FTC) released a report about the Internet of Things (IoT): the set of technologies and devices outfitted with sensors collect data, communicate directly with each other, transmit data to the development company, and publish data to the Internet with human interactions. The FTC recommended:

"... a series of concrete steps that businesses can take to enhance and protect consumers’ privacy and security... The Internet of Things is already impacting the daily lives of millions of Americans through the adoption of health and fitness monitors, home security devices, connected cars and household appliances... Such devices offer the potential for improved health-monitoring, safer highways, and more efficient home energy use... However, the FTC report also notes that connected devices raise numerous privacy and security concerns that could undermine consumer confidence."

Experts have estimated 25 billion connected devices this year, and 50 billion by 2020. FTC Chairwoman Edith Ramirez said:

"The only way for the Internet of Things to reach its full potential for innovation is with the trust of American consumers... We believe that by adopting the best practices we’ve laid out, businesses will be better able to provide consumers the protections they want and allow the benefits of the Internet of Things to be fully realized.”

The FTC held a workshop during November 2013 with interested industry participants. The report listed best practices identified and discussed during that workshop. Some important limitations of the report:

"... our discussion is limited to IoT devices that are sold to or used by consumers. Accordingly, the report does not discuss devices sold in a business-to-business context, nor does it address broader machine-to-machine communications that enable businesses to track inventory, functionality, or efficiency..."

The report listed some of the benefits from IoT devices:

"... connected medical devices can allow consumers with serious medical conditions to work with their physicians to manage their diseases. In the home, smart meters can enable energy providers to analyze consumer energy use, identify issues with home appliances, and enable consumers to be more energy-conscious. On the road, sensors on a car can notify drivers of dangerous road conditions, and software updates can occur wirelessly, obviating the need for consumers to visit the dealership..."

The disadvantages from the Internet of Things:

"... a variety of potential security risks that could be exploited to harm consumers by: (1) enabling unauthorized access and misuse of personal information; (2) facilitating attacks on other systems; and (3) creating risks to personal safety. Participants also noted that privacy risks may flow from the collection of personal information, habits, locations, and physical conditions over time. In particular, some panelists noted that companies might use this data to make credit, insurance, and employment decisions..."

The report listed recommended a "security by design" approach with best practices for security, personnel, data minimization, and legislation. For security best practices, companies should:

1. Conduct privacy or security risk assessments,
2. Minimizing the data collected and archived,
3. Test their security measures before launching products and services, and
4. Monitor products (and services) throughout the life-cycle and patch known vulnerabilities.

For personnel best practices, the report recommended that companies:

1. Train all employees about good security, and ensure that security issues are addressed at the appropriate level of responsibility within the organization,
2. Retain vendor and sub-contractors that are capable of maintaining reasonable security and provide reasonable oversight
3. Identify significant risks within their systems, and implement corresponding defenses
4. Consider implementing reasonable access control measures to limit the ability of unauthorized persons to access a consumer’s device, data, or even the consumer’s network

To minimize the amount of consumers' sensitive information collected, companies should:

"... examine their data practices and business needs and develop policies and practices that impose reasonable limits on the collection and retention of consumer data... data minimization is a flexible one that gives companies many options. They can decide not to collect data at all; collect only the fields of data necessary to the product or service being offered; collect data that is less sensitive; or de-identify the data they collect...

Companies that collect consumers' information should obtain consumers' consent before collection. The report seemed to focus more on balancing consumers' needs for notice and consent with companies' needs for streamlined systems (link added):

"This does not mean that every data collection requires choice. The Commission has recognized that providing choices for every instance of data collection is not necessary to protect privacy. In its 2012 Privacy Report, which set forth recommended best practices, the Commission stated that companies should not be compelled to provide choice before collecting and using consumer data for practices that are consistent with the context of a transaction or the company’s relationship with the consumer. Indeed, because these data uses are generally consistent with consumers’ reasonable expectations, the cost to consumers and businesses of providing notice and choice likely outweighs the benefits. This principle applies equally to the Internet of Things."

Many devices connected to the Internet of Things will not have traditional interfaces (e.g., keyboard, screen) like you see today with computers, laptops, tablets, and smart phones. Hence:

"Staff acknowledges the practical difficulty of providing choice when there is no consumer interface and recognizes that there is no one-size-fits-all approach. Some options include developing video tutorials, affixing QR codes on devices, and providing choices at point of sale, within set-up wizards, or in a privacy dashboard. Whatever approach a company decides to take, the privacy choices it offers should be clear and prominent, and not buried within lengthy documents."

The example that comes to mind are Internet-connect refrigerators. For consumers to make informed choices, manufacturers must provide privacy and terms of use policies to consumers before and after purchase. This suggests alternative delivery methods of privacy and terms of use policies. I am sure that other privacy bloggers and privacy advocates will watch closely how these IoT devices are marketed.

Last, the report discussed the current state of legislation. the consensus seemed to be that more is needed at both the state and federal levels.

Download the FTC report: "Internet of Things: Privacy & Security In a Connected World" (Adobe PDF) from the FTC site. A copy is also available here.

What are your opinions of the Internet of Things? Of the recommended best practices? How would you like IoT manufacturers to delivery policies before purchase?

Looking For An Electric Company With Lower Prices? What Massachusetts Residents Need To Know

Recently, sales representatives from several energy companies rang our doorbell. Some of the electric company names: Direct Energy, Just Energy, and Spark Energy. My wife and I listened to some of their pitches, because our electric bill went up during the past few months. Way up.

This blog post discusses what we experienced and learned during our search for another electric company, including some online tools and the criteria we developed. I've written about some of the companies in this blog. A sales rep from Just Energy first visited in 2010. Should you decide to switch to another electric company, that's something only you can decide. You know your electricity needs and home situation best. Hopefully, this blog post will help you identify the considerations to make the best decision possible.

Before choosing a new supplier, consumers should first understand their usage. We did. Our latest bill:

Electric Services	Rate ($/KWH)	KWH	Total $
Delivery Services: Customer Charge Distribution Transition Transmission Renewal Energy Energy Conservation Delivery Services Total	-- -- 0.06090 X -0.00095 X 0.01913 X 0.00050 X 0.00250 X	-- -- 220 220 220 220 220	-- 6.43 13.40 -0.21 4.21 0.11 0.55 24.49
Supplier Services Generation Charge Basic Service Fixed	-- -- 0.15045	-- -- 220	-- -- 33.10
Total Cost of Electricity			57.59
Other Charges Or Credits Storm Performance Adjustment			-- 1.38
Total			58.97

KWH is a kilowatt-hour. Electric bills include two broad categories of charges: delivery and generation. Standard stuff. The Massachusetts EEA Department site explains electric bills:

"Delivery charges include: distribution, transmission and transition charges, as well as costs related to the development of renewable energy sources and efficiency programs... The only way to reduce the delivery portion of your bill is to use less electricity..."

The EEA Definitions page explains:

"Generation is the act of converting various forms of energy (such as oil, gas, coal, sun, wind or nuclear) into electricity. Generation is the only part of the electric industry that has been opened to competition. The transmission and distribution of your electricity will continue to be regulated..."

Competition started In Massachusetts in March 1998 after passage of the Massachusetts Electric Industry Restructuring Act of 1997 (“Restructuring Act”). EverSource (formerly N-Star) is the utility that provides our electricity.

Next, we reviewed our monthly bills. This helped us understand how high the price had risen:

	Generation Charge
Month	Cents Per KWH	Cumulative Increase
January, 2014	8.448	--
July, 2014	9.333	10.5 %
August, 2014	9.357	10.7 %
September, 2014	9.379	11.0 %
February, 2015	12.212	44.6 %
March, 2015	15.046	78,1 %

78 percent is a huge price increase. Our historical usage by type of charges:

Month	KWH	Delivery Services	Generation
January, 2014	322	$ 34.42	$ 24.17
July, 2014	284	$ 30.68	$ 26.51
August, 2014	299	$ 31.77	$ 27.98
September, 2014	278	$ 29.85	$ 26.07
February, 2015	301	$ 31.59	$ 36.76
March, 2015	297	$ 31.05	$ 44.69

You'll probably want to analyze your bills like we did. Our residential usage averages about 300 KWH monthly. So, delivery charges decreased slightly while generation charges have almost doubled. Not good. So, we started to shop around for service from another electric company.

The sales representative from Direct Energy quoted (verbally) a price of about 9 cents per KWH. An online search found a C+ rating of Direct Energy by the Better Business Bureau (BBB). Too many complaints and too many unresolved complaints. Not good. Some of the complaints were similar to what we'd learned about Just Energy. The door-to-door sales representatives were mostly college-age students. Most immediately demanded to see our monthly utility bills without first fully explaining their offers. A general statement about a fixed, lower price is not enough.

We've learned that often the devil is in the details. It is wise to closely read the contract, because that document describes what you get, what you pay, and any associated fees. We don't buy on impulse. Plus, the Massachusetts Attorney General advised consumers about door-to-door sellers of electric and gas services:

1. Check your utility bills: to make sure that your service has not be switched to a different provider
2. Protect your sensitive information: do not show your utility bills to door-to-door sales people. Only show your utility bills after you have decided to do business with a provider.
3. Be cautious: your current service provider does not send door-to-door sales people.
4. Know your rights: do not let door-to-door sales people into your home unless you know them personally. Contact local police if the sales agent refuses to leave or you believe you are threatened.

Meanwhile, the folks at Spark Energy sent (unsolicited) their flyer via postal mail:

The flyer quoted $36.00 in monthly savings. It is important to read the fine print because that quote was based upon a home using 1,000 KWH per month. Do you use 1,000 KWH in a month? We don't. Not even close. We use about a third of that, or 300 KWH per month. So, our savings would be far less: (14.90 - 10.80 cents per KWH) X 300 KWH = $12.30. Big difference.

To learn more about Spark Energy, I visited its website. To view information, the site asks you to first enter your ZIP Code. I did:

It presented several plans for where I live. Some plans included renewable energy sources, with a higher price. I selected the "Details" link for the Price Protect 12 Month plan. It mentioned a $4.95 monthly fee and a $100.00 early termination fee. Not good. This meant our savings would be even smaller: about $7.35 (equals $12.30 - $4.95) monthly if we had purchased this plan. That's about the price of two cups of coffee and a doughnut. Not much.

The Spark Energy flyer also had a postcard attached which promised big savings:

The postcard mentioned ChooseEnergy.com. I visited the site. To view information, the site asks you to first enter your five-digit ZIP Code. I did:

The site displayed recommended plans (above) and a sortable list of available plans in my area:

There were several plans; some from the same provider. The plans differed by KWH price, by duration (e.g., six, 12, or 24 months), by renewal energy mix (ranging from zero to 100%), and by fees (e.g., early termination fees from $100 to $200). The site has some strengths and weaknesses.

The key strengths: it's free, easy to read, can easily sort the list of plans, and can easily access contract details about each plan. The key weaknesses: uses a high default KWH usage, can't search for by specific fee type (e.g., monthly, termination, billing, deposit, etc.), and ambiguity about what happens at the end of the contract or when you move. At the end of the contract, many plans default to a higher, variable price. That may be good for the electric company, but not good for consumers who want a predictable low price. I wanted to search for plans that auto-renew from a low fixed price to another low fixed price. The site doesn't seem to provide that search feature.

After reading the contracts for several plans, I learned that some include terms where the plan automatically switches to  your new residence when you move. What? I expect a move to terminate the contract. The site needs to clarify this; and ideally make it a search criteria. The contract for one plan read (bold emphasis added):

"XOOM is an independent retail marketer of electricity and is not affiliated with your local utility. Your local utility will continue to deliver your electricity, read your meter, send your bill, and make necessary repairs. Your local utility will also respond to emergencies..."

What's really going on here? The Massachusetts EEA Department site explained:

"If a consumer selects a competitive supplier, he/she will be paying both the distribution company (for the delivery charge) and the competitive supplier (for the generation charge). Depending on the competitive supplier, the consumer may receive one bill (combined billing) or two separate bills. In general, smaller consumers (residential and small commercial) will receive one bill from the distribution company. The distribution company will then transmit generation charges to the consumer’s chosen competitive supplier."

So, when you switch to another electric company, it's really a partial switch. You might get a single monthly bill or you might get two monthly bills. The legacy utility still has a role to deliver your electricity and maintaining the electric grid. Deregulation hasn't changed who produces electricity. Deregulation only lets consumers select from a larger group of power suppliers.

The two-bill possibility highlights the economics of the electric power industry. It requires a massive amount of money to build (and maintain) a power plant. Even more to build (and maintain) the electric grid: the network of power lines and facilitates that carry and distribute electricity from power plants to your home. No supplier can afford to build a parallel, duplicate structure. So, regulation was used to guide a naturally monopolistic industry to avoid abuses. Maybe you studied this in economics classes during college.

We've seen this economic situation before. Telecommunications. Originally, there was a single supplier (AT&T or "Ma Bell") guided by regulation. Then, the market was deregulated in the 1980s with local service providers and long-distance providers. With that deregulation, competing companies still shared the existing infrastructure of phone lines and local facilities. Economically, it wasn't feasible to build duplicate, parallel structures. With the introduction of wireless services, suppliers began building their own networks. Some got out of the landline business.

All of this raises the question: what benefits have electric deregulation provided consumers? Deregulation seems to have fallen far short on its promises. Advocates promised lower prices from competition. The fact is competition exists only with electric generation. We consumers have gotten slightly lower prices in some instances, and far higher prices in many other instances. Remember, after crunching the numbers we found the savings were minimal; eaten up by monthly and other fees. And, that savings assumed no price spikes at the end of the contract.

So, the Choose Energy site seems like place to start your search. it's mildly helpful but lacking some key features. It would be more helpful it it included a search parameter for plans guaranteeing single, consolidated monthly bills. The site lets you filter or narrow your search results to plans that have or don't have fees. That was mildly helpful, but it seemed too general and inconsistent. For example: I filtered my list for plans to show only plans without fees. The site presented a Just Energy plan where the contract fine print stated it might pass through a Billing Fee from the Utility. What's that? How much? Neither the site nor the contract explained this. I expected more. A "no fees" filter option should mean just that.

And, there's the issue of deposits. Some plans require them. This should be a search parameter, too.

I found that whenever I left my list of plans to read other site pages and returned to my list, I had to re-enter into the calculator our (lower) KWH monthly usage instead of the (higher) default usage amount. A better site experience would:

• Prompt users for their KWH monthly usage and remember those selections,
• Provide searching by fee type (e.g., monthly, cancellation, billing, deposits, etc.),
• Be consistent about "no fees" filtering,
• Provide searching for move terms, and
• Provide searching by contract end terms.

All of this caused me to wonder exactly who Choose Energy is. I browsed the About section of its site. It didn't say much beyond the basics: company values, executive names and photos, press releases, a San Francisco street address, and this corporate description:

"Choose Energy™ is an easy-to-use online marketplace that helps residents and businesses comparison-shop for their ideal energy supplier... that provides a convenient and secure way for consumers to compare rates and plans for energy suppliers in their area – and make the switch all in one place. Plans are curated from only reliable and trusted suppliers and provide renewable options as well as flexible pricing to ensure customers find the plan that best fits their needs. Choose Energy is available in 11 states currently, with additional states coming on-line in 2014.

Typical content. I expected more. The copy was old, too. It's 2015, not 2014. If the site can't update this, then I wonder what else is lacking. The site should explain its process and criteria for curating plans and providers. If it has an explanation, I couldn't find it. A sales person from Direct Energy visited our home, but the Choose Energy site didn't display any Direct Energy plans for my ZIP Code. Why the difference? Which is correct?

The more I looked, the more questions I had. How can people based in California be experts about the Massachusetts energy marketplace? What are the details about its partnerships with energy companies? The Choose Energy site listed its corporate values:

For the executives at Choose Energy, I have this feedback: if you are serious about disrupting the industry, raising the bar, and being transparent, then do it. No half measures. Include the additional search parameters suggested above. Your site page describing Just Energy doesn't mention the company's $4 million payment to settle deceptive marketing allegations. Why not? That seems like pretty important information for consumers to know. Don't hide stuff. Elevate all of the important details from contractual copy. Make it searchable. Explain your curate process. Surface all the nitty-gritty. That's what consumers want. Half measures give the impression that your site is nothing more than a slick industry marketing scheme, and not a reliable, independent information resource for consumers.

Next, I visited the Mass Energy site to learn more. The FAQ page answered many of my questions:

"In Massachusetts, over 80% of our electricity is generated from fossil fuels and nuclear power resources... the remainder comes in the forms of trash-to-energy, large hydro projects, various, unidentified types of power imported from other regions, and other sources that are not environmentally friendly. A state law, the Renewable Portfolio Standard, requires your utility to include just 8% new renewables in 2013, with a 1% increase per year. Your utility is required to send you a quarterly disclosure label which describes in detail the energy sources and emissions resulting from the electricity you use... All New England states share one single network of power lines, called the electric grid. Generators from all over the region feed power into this grid and energy is drawn out on an as-needed basis. Since our electricity is based on a regional mix, the electricity that is actually delivered to your home is determined by which power generators are located closest to you..."

The Mass Energy FAQ page also mentioned something I hadn't read anywhere else:

"Mass Energy is a non-profit organization, and your payments are recognized as being made for the public good. They are considered a tax-deductible charitable contribution for federal income tax purposes, if you itemize on your federal return. If you are enrolled in New England GreenStart, you would be able to deduct 2.4 cents for each kilowatt hour... If you are enrolled in New England Wind, you would be able to deduct 3.8 cents per kilowatt hour... You cannot get this benefit from any other renewable energy supplier in Massachusetts..."

So, while you might pay a little more for energy from renewable sources, there is the tax-deduction benefit to consider. More numbers to crunch. As we searched for an alternative electric company, there was more to consider than we first thought. No way is this an impulse purchase.

Some states offer their residents websites that compile offers from several electric providers into a single place. If you live in Texas, visit Power To Choose. The Choose Energy site covers Massachusetts and several other states: Connecticut, Illinois, Maine, Maryland, Michigan, New Jersey, New York, Pennsylvania, and the District of Columbia. I am sure that there are other sites for other states.

As we researched suppliers, we began to compile a list of criteria about what we wanted from an electric company. Our list was based upon our needs and our values:

1. Foremost, a lower and predictable generation price
2. A contract with the most consumer-friendly terms possible. Ideally, no monthly fee and an auto-renewal process that won't hike its price of electricity.
3. A provider offering energy from "green" or renewable sources. We live in a small condominium, and the other two owners are not interested in installing solar panels or a small wind turbine. Exterior modifications must be agreed upon by all three unit owners.
4. A reputable provider with good customer satisfaction. Does it have few or many complaints? Does it respond quickly to inquiries? Does it honor its contractual commitments? There are several Internet sources consumers can use. I mentioned the BBB above. Besides news reports about Direct Energy, I read the Glass Door site, which features reviews by current and former employees. If a provider can't keep their employees happy and solve staff churn, then they probably won't keep their customers happy either.
5. A provider that doesn't abuse customers' privacy, and is transparent in their policies about customers' data collected, archived, and shared; and lists its business partners.

You'll develop your own list of criteria. You should. You may want the wireless convenience, such as programming your heating/cooling levels with your smartphone. Or you may want your heating/cooling controls integrated with your home security system. Or, you may want a provider that parses your electric usage by appliance consumption. There is a whole new world of choices available.

And, it's easy to verify an electric company's identity. The Massachusetts EEA Department maintains a list of licensed companies. If a company that contacted me (via phone, e-mail, etc.) isn't on this list, I wouldn't do business with them. And I definitely wouldn't share my bill details or any personal information.

Unhappy with your current electric company? Massachusetts residents can submit complaints online at the Department of Public Utilities (DPU) site, or via phone or postal mail.

The bottom line: it is still a roll of the dice. When you switch to another electric company, you are essentially betting that the price in their contract you sign will be lower than the market price, or what you would have paid otherwise. If it is lower, then you've won. If it's higher, then you've lost. Of course, the electric provider is betting against you; that the price you pay them will be higher than what you could have paid otherwise. If the price is lower during your contract, they hope to raise it much higher when your contract ends. After all, a for-profit business has to make its money somehow.

That sounds a lot like how consumers purchase wireless plans for smartphones. You sign a two-year contract making three bets: a) the monthly price you pay will be lower than what you might have paid otherwise; b) your calls, texts, and Internet usage won't exceed any caps so you avoid additional fees; and c) you won't have to terminate early and pay a high cancellation fee.

How well did you do with your wireless plan choice? A lot of consumers chose poorly and experienced huge monthly wireless bills. Now you know what you' face with electric suppliers. Do your homework, shop wisely, and read contracts before signing them.

We're still looking. What sites have you used to research electric suppliers? What criteria did you use when selecting an electric company? Did you switch or stay with your legacy utility? Why?

Less Competition. Consumers Pay More And Get Less

Business leaders and economists like to promote the idea of a free marketplace, where there is plenty of competition and consumers get more benefits, such as lower prices and more choice. So, are consumers getting a good deal? The facts suggest not.

On Monday, April 27, former U.S. Labor Secretary and professor Robert Reich posted the following:

"We’re paying more and getting less because giant companies face less and less competition. For example:

1. U.S. airlines have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four.

2. 80% of Americans are served by just one Internet Service Provider – usually Comcast, AT&T, or Time-Warner.

3. The biggest banks have become far bigger. In 1990, the five biggest held just 10% of all banking assets. Now the biggest five hold almost 45%.

4. Monsanto owns the key genetic traits in more than 90% of the soybeans and 80% of the corn planted by U.S. farmers.

5. Giant health insurers are larger; the giant hospital chains, far bigger; the most powerful digital platforms (Amazon, Facebook, Google), gigantic.

Whatever happened to antitrust enforcement?"

There are more examples. Here in the Northeast, EverSource, a publicly-traded utility holding company, provides residential energy services in Connecticut, Massachusetts, and New Hampshire. EverSource was created when Northeast Utilities merged with NSTAR Electric & Gas. Northeast Utilities included Connecticut Light & Power, Public Service of New Hampshire, Western Massachusetts Electric, and Yankee Gas. Earlier this year, electricity rates in Boston rose from 29 percent higher to 63 percent higher in February than the national average.

What are your opinions? What consolidation examples come to mind? Are we consumers getting a good deal, or are we getting screwed?

Hydraulic Fracturing, Safety, And America's Future

You've probably seen the television commercial. If not, it features an attractive blonde with a calm, reassuring voice emphasizing America's bright future from hydraulic fracturing (a/k/a "fracking") for oil and gas:

The energy is often contained in shale rock, which must be fractured or broken apart in order to release and access the energy supplies. Many people are concerned about safety and contaminated ground water. If you listen closely to the commercial, it briefly mentions safety:

"... new technologies are safely unlocking vast domestic supplies of oil and natural gas ..."

So, how safe is fracking? Does it threaten ground water? ProPublic investigated and reported:

"A peer-reviewed study published in 2014 found that drinking water wells near fracking sites in Pennsylvania and Texas were contaminated with methane that had the chemical signature of gas normally found only deep underground. Rob Jackson, a Stanford University professor of earth system science who coauthored the 2014 study, told us that drilling that uses hydraulic fracturing has “contaminated ground waters through chemical and wastewater spills, poor well integrity, and other pathways.”

The report emphasized that how one defines the term "fracking" matters when discussing safety:

"Fracking involves injection of a large volume of water, sand and a cocktail of chemicals (known as fracking fluid) deep underground to fracture the rock and allow gas to seep out. It is also used for oil extraction... the term “fracking” is sometimes used to describe the entire process of drilling for natural gas, but that isn’t accurate. After a well is drilled, cemented and prepared in other ways, only then is the well “fracked” — the actual stimulation of rock far beneath the earth’s surface to allow extraction of the gas."

So, it is critical to define fracking as the whole process, not a subset such as only the fracturing of rock:

"... the scientists we interviewed say that it doesn’t make sense to separate fracking from the entire gas and oil production process, and there is ample evidence that the overall process can cause contamination of water supplies. As we noted above, the new DOI rules cover the entire process including fracking, well casings and other activities."

Some of that evidence:

"Among the first studies specifically linking natural gas development and fracking to water quality was a paper published in the Proceedings of the National Academy of Sciences in 2014 that analyzed drinking well water near fracking operations in Texas and Pennsylvania. In that study, which was coauthored by Jackson at Stanford, researchers identified the presence of methane — the primary component of natural gas — in drinking well water near unconventional drilling sites in the Marcellus Shale region in Pennsylvania and the Barnett Shale region in Texas. Using chemical signatures of certain gases, the researchers were able to determine in several cases that the methane was from deep underground — evidence that the drilling operations had caused the contamination. The study found that faulty and leaky wells were likely to blame...”

When you view a commercial or hear a fracking proponent claim that there's no proof that fracking contaminates ground water (e.g., it's safe), you now know otherwise. During an open, honest, and complete conversation about safety everyone defines the terms they use, and hopefully address the entire process. If it's unclear, demand clarification.

In my opinion, to claim something is safe while only addressing part of the process is simply dishonest. Words matter. Definitions matter.

ProPublic also reported:

"Partially in response to [safety] concerns, the Department of the Interior finalized a regulation on March 20 regarding hydraulic fracturing and related activities on public and tribal land. The regulation includes a number of provisions related to fracking and other aspects of natural gas drilling activity. For example, the rule includes “[p]rovisions for ensuring the protection of groundwater supplies by requiring a validation of well integrity and strong cement barriers between the wellbore and water zones through which the wellbore passes.” It has specific requirements for constructing cement casings for wells, and monitoring pressure on certain well parts during fracking operations. And it also requires disclosure of the chemical contents of fracking fluids."

That sounds sensible to me, since the regulation looks at the whole process. Of course, fracking proponents oppose the federal regulations, and want to shift regulations locally to the states:

"Inhofe, a Republican from Oklahoma who chairs the Senate Environment and Public Works Committee, opposes the regulation. He, along with 26 cosponsors, introduced a bill that would specifically put the responsibility for regulating relevant oil and gas operations in the hands of the states rather than the federal government."

That sounds like: if you can't fool all of the people all of the time, then maybe you can fool some of the people. Ground water supplies don't magically stop at state lines or boundaries. Ground water contamination doesn't magically stop at state lines, either.

When I think of fracking and safety, it is important to remember the history of how we got here:

"The federal Energy Policy Act of 2005 contained a provision that has come to be known as the "Halliburton Loophole," an exemption for gas drilling and extraction from requirements in the underground injection control (UIC) program of the Safe Drinking Water Act (SDWA). Other exemptions are also present in the Clean Air Act and Clean Water Act."

So, this law was enacted during the Bush-Cheney administration's tenure. That energy producers pursued these exemptions before starting the current fracking boom speaks volumes. They probably knew that water contamination was likely, and/or that they couldn't safely drill and extract oil and gas. So, too, did compliant politicians.

You can't have a bright future with polluted drinking water and groundwater. Inhofe's proposed legislation should be opposed. Contact your elected officials, and tell them what you think.

What are your opinions of fracking? Should regulations be shifted to only the states?

Telemarketers Offer Energy Discounts. Have You Received These Calls?

This seems to be the week to receive phone calls from telemarketers.

The first call this week was 2:10 pm Tuesday afternoon. It was a robocall offering electric power discounts for people who qualify. The automated message asked me to have my monthly bill ready and to press "5" to speak with a representative. Previously, I have received both phone calls and visits by door-to-door sales people, Plus, I am aware of several utility scams. I was curious to learn what the latest pitch is, so I pressed "5" to continue the call.

A representative quickly joined the phone call and asked if I had my bill ready. I said yes, but that I needed to know first who I was talking with. The representative said his name was Robert. No last name. Then, I asked for his company's name and phone number. He said his company was "Power Source," and that he was in their call center. He refused to give a phone number (a typical habit of scam artists; especially those calling from outside the country).

Our phone call was off to a bumpy start, and it quickly got worse. I asked Robert for his company's website address. He replied that I could Google the company's name to learn more. Not a very friendly answer. It seemed to me that Robert (probably not his read name) was not going to disclose anything meaningful about Power Source (probably not its real name). Yet, he felt perfectly fine asking me to share details from my utility bill, which I consider highly confidential.

The Power Source name is strikingly similar to EverSource, a real, publicly-traded utility holding company that provides residential energy services in Connecticut, Massachusetts, and New Hampshire. EverSource was created when Northeast Utilities merged with NSTAR Electric & Gas. Northeast Utilities included Connecticut Light & Power, Public Service of New Hampshire, Western Massachusetts Electric, and Yankee Gas.

I told Robert that since he was unwilling to share any detailed information, neither was I. He said thank you and hung up.

My online search for "Power Source" did not find a website for a power or electric company named "Power Source." More importantly, this robocall was illegal. Why? The U.S. Federal Trade Commission (FTC) explains:

"You've probably gotten robocalls about candidates running for office, or charities asking for donations. These robocalls are allowed. But if the recording is a sales message and you haven't given your written permission to get calls from the company on the other end, the call is illegal. In addition to the phone calls being illegal, their pitch most likely is a scam."

I have no relationship with a company named Power Source, and my home phone is registered in the national Do Not Call Registry. Consumers can report illegal robocalls at the FTC website. I did. So, if you receive a robocall from Power Source, you now know what to do with it.

The second call was 6:15pm Wednesday afternoon. It was a traditional phone call and not a robocall. Again, I asked the caller to identify himself. He said his name was James, who also offered energy discounts for home owners. Again, I asked for his company's name, phone number and website address. He identified his company as Solar Green Energy, but refused to provide a phone number.

Notice a pattern?

During the second call, I went online. A quick search for "Solar Green energy" found a dot-com website with that name. The site was for sale, and it didn't provide any details about the company nor its offerings. James insisted that if I qualified, he'd schedule a representative to visit to fully explain the service. I held firm and told him I wasn't sharing anything until I knew more about who I was talking with. He repeated his request for me to share information from my utility bill, and I hung up.

Afterward, I thought about both phone calls. They weren't really a surprise given huge electricity rate increases recently in Boston:

"... the Bureau of Labor Statistics said electricity prices in Boston were 63 percent higher than the national average in February — well up from last year, when local prices were 29 percent higher. Utilities have blamed insufficient pipeline capacity to supply the region, coupled with high winter demand."

To avoid getting slammed (e.g., your utility service changed without your permission) or being over-charged by a company practicing deceptive marketing, the Massachusetts Attorney General's Office advises consumers to:

1. Check your monthly utility bills: to make sure that your service has not be switched to a different provider without your consent,
2. Protect your sensitive information: do not show your utility bills to door-to-door sales people. Only show your utility bills after you have decided to do business with a provider.
3. Be cautious: your current service provider does not send door-to-door sales people.
4. Know your rights: do not let door-to-door sales people into your home unless you know them personally. Contact local police if the sales agent refuses to leave or you believe you are threatened.

For me, it's simple. If a caller asks me to disclose my personal information while refusing to fully identify their self, their employer, and the services offered, then I don't do business with them. Period. And, I definitely don't do business with illegal robocallers. I expect telemarketers to clearly and completely explain their discount program, first.

Have you received phone calls from Power Source or Solar Green Energy? If so, please share your experiences below including the date, time, company name, representative's name, and content of your call.

California Utility Allegedly Used Safety Funds For Executive Pay. Huge Electric Rate Increase In Massachusetts

The Los Angeles Times reported about an investigation to Pacific Gas & Electric Company:

"Money collected from ratepayers and earmarked for pipeline safety was instead spent on executive pay raises by the state's largest utility, Pacific Gas & Electric Co., in the months before a deadly pipeline explosion in 2010... The new head of the Public Utilities Commission wants to increase financial penalties against Pacific Gas & Electric Co. to a record $1.6 billion for negligence related to the 2010 pipeline explosion that killed eight people and leveled a neighborhood in the Bay Area suburb of San Bruno."

Fines? Jail time seems appropriate instead. People died, and:

"Records released a few days after the explosion showed that PG&E received approval in 2007 to spend $5 million of ratepayer money to replace a high-risk section of the 30-inch pipeline north of the San Bruno blast site. The work on the 1950s-era pipe was never performed. And in 2010, the utility asked for another $5 million to do the same job, according to PG&E documents submitted to the PUC."

Each state's Public Utility Commission (PUC) oversees and the utilities (e.g., water, electricity, gas), including how much they can raise prices to ratepayers. Consumers and businesses are ratepayers. The California PUC's mission:

"The California Public Utilities Commission serves the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement and a healthy California economy.  We regulate utility services, stimulate innovation, and promote competitive markets, where possible, in the communications, energy, transportation, and water industries"

Seems like the public interest wasn't served very well, if at all. When scheduled (and paid for) maintenance and safety work isn't performed, one has to question whether the state PUC is doing its oversight job effectively.

This news story deserves monitoring. It makes one wonder where else this type of executive wrongdoing happens. Meanwhile, a Massachusetts state legislator is investigating huge electricity rate increases in Boston:

"... the Bureau of Labor Statistics said electricity prices in Boston were 63 percent higher than the national average in February — well up from last year, when local prices were 29 percent higher. Utilities have blamed insufficient pipeline capacity to supply the region, coupled with high winter demand."

63 percent is a huge rate increase. Huge. Did you pay go up 63 percent? Mine didn't, and I doubt that yours did either. Did your electricity consumption go up 63 percent? Mine didn't, and I doubt that yours did either. The "public good" is a balance between the needs of ratepayers and the utility providers. Things seem lopsided.

Besides the negative impact upon the Boston and metro-area economy, the huge electric rate increase is especially difficult for retirees on fixed incomes. State politicians, the Boston Mayor's office, and the Massachusetts PUC need to explain how they let this huge increase happen.

What are your opinions of the above events in California? Massachusetts residents: what do you think about the recent rate increases in your electric bills?