Just Energy “ESCO” Class Action: A $100,000,000 lawsuit to recover on behalf of energy customers whose gas and electric bills skyrocketed after switching from their local utility to Just Energy.
Traditionally, residential gas and electricity was supplied by regulated utilities like Con Edison, and the rates these utilities could charge were strictly controlled. In the 1990s, however, Enron’s unprecedented lobbying campaign resulted in deregulation of state energy markets, such that consumers were permitted to choose from a variety of companies selling residential energy. Seizing on deregulation, independent energy service companies (“ESCOs”) like Defendant Just Energy have grown rapidly.
Founded in Canada in 1997 and expanding to the United States in 2004, Just Energy is now the 11th largest ESCO in the United States, with over 1.8 million customers across North America. In achieving its rapid expansion, Just Energy has not simply bested its competitors. Rather, it has developed and deployed underhanded business practices that result in its energy customers paying far more than they would have paid had they stayed with their traditional utilities.
Just Energy entices residential customers to sign up for its service by offering its energy at low initial “teaser rates.” Yet the company doesn’t alert unsuspecting customers that when the teaser rate period expires, consumers are charged exorbitant variable energy rates. Just Energy’s customers are given no advance notice of these excessive variable rates. The company also does not disclose to customers that its rates are consistently higher than the rates charged by traditional utilities, or how variable rate customers can calculate (and avoid) steep variable gas and electricity charges.
Just Energy also defrauds customers through a pricing strategy rigged in the company’s favor. When the underlying wholesale market price of energy that Just Energy purchases for re-sale goes up, Just Energy simply passes on these costs to their customers by raising rates. However, when the market price goes down, Just Energy’s rate remains at an inflated level higher than the market rate. Just Energy’s practice of charging inflated electric and gas prices is intentionally designed to maximize revenue.
Only through a class action can the Company’s customers remedy Just Energy’s ongoing wrongdoing. Because the monetary damages owed each customer are small compared to the much higher cost a single customer would incur in trying to challenge Just Energy’s unlawful practices, it makes no financial sense for an individual customer to bring his or her own lawsuit. Further, many customers don’t realize they are victims of Just Energy’s deceptive conduct. With this class action, Wittels Law seeks to level the playing field and make sure that companies like Just Energy engage in fair and upright business practices.
For more information, or to join this case, contact us.