Ever wonder where all the masterminds of the mortgage and derivative debacle have gone? According to Mother Jones, they’re lurking in the electric utility business. (“Out Front, Electric Shadyland,” by Stephanie Mencimer, Mother Jones, January/February, 2014 pgs. 5-10.) Under newly promulgated laws, small, independent companies can buy energy from larger ones. The rationale is that competition will bring down prices to the benefit of consumers. The real reason is that fracking has created energy surpluses which large companies want to sell to these new middlemen.
The smaller companies being formed, Starion, Glacial Energy and Steam Energy among them, send out aggressive salesmen who work on commission. Their job is to convince consumers to sign energy contracts with these new entities in exchange for lower rates. Unfortunately, author Stepahie Mencimer has found that the promise of reduced cost can go unmet and that sometimes utility bills under a new contract can climb into the stratosphere.
Of course, the lure of lower energy costs plays best in the poorest neighborhoods. Here customers exist who are probably the least savvy when it comes to knowing how to defend themselves against unfair business practices. (Ibid, pg. 7) That such practices exist comes as no surprise to Mencimer as her research shows some of the players in this new field are the same folks who orchestrated the mortgage disaster. (Ibid, pg7) True, laws exist to protect the consumer but the fines are so small, companies prefer to pay them rather than adjust their business model. (Ibid 10.)
The sad fact about renegades of the mortgage scandal is that few of them landed in jail. Mostly, they’re hatching new schemes that may find their way to your utility bill.
(Courtesy of yahoo.com)
