(HUDSON, N.Y.) – One of the only accomplishments Hudson Mayor William Hallenbeck Jr. touted in his re-election campaign last fall was turning over the city’s electric bill account to a company called Viridian. The mayor said it made Hudson the first city to be powered by “all-green” electricity – as if there could be such thing coming through conventional electrical cables – and claimed it would save the city many thousands of dollars.
Now, the Register-Star newspaper reports that “The city of Hudson’s municipal utility bill increased by one-third, or $113,782, over the past year” (“Moore: City’s energy bill up 33% in 1 year”). A report given by Common Council President Don Moore at Monday’s council meeting “raises questions about whether the city’s switch to the wind-power [sic] delivery company Viridian was fiscally prudent.”
A quick, 10-minute Google Search for “Viridian” and “energy bills” turns up a treasure trove of stories from unhappy customers; investigations challenging Viridian’s claim to providing “green” energy; complaints and lawsuits about the company’s bait-and-switch tactics that wind up costing customers way more than they were paying before they contracted with Viridian, and generally draws a picture of the company as one whose practices – especially in regards to its sales force – are comparable to that other well-known sales scam, Amway.
Finally, just last month, a class-action suit was brought against Viridian in Virginia for precisely the experience that Hudson has gone through. The website Energy Choice Matters reports in “Another Class Action Suit Brought Against Different Retail Supplier” that “The latest suit, seeking class action status, has been filed in United States District Court for the District Of Maryland against Viridian Energy, LLC, and similar to another recent suit against a competitor, focuses on the supplier’s pricing as compared to its marketing and disclosures.”
For a more detailed look at how Viridian and other energy resellers rip off their customers, read “Electric Shadyland: How Power Companies Rip You Off,” in Mother Jones magazine, which explains, “Retail electric companies aren’t really power companies. Instead, they’re middlemen who buy power in the wholesale market, largely from the same power plants once owned and operated by the monopoly utilities that were broken apart in the late 1990s and early 2000s. Retail firms then sell the electricity to consumers, delivering it via the transmission lines still owned by traditional utilities. All that really changes is the name on your bill…. These companies have aggressively employed telemarketing, door-to-door visits, TV ads, and pamphlets, luring customers into restrictive contracts promising savings that did not materialize. … Paula Carmody, the people’s counsel for the state of Maryland, says allegations of dubious marketing among retail energy suppliers are not uncommon in her state, ranging from ‘slamming’ — switching a customer to a new utility without authorization — to unintelligible contracts and excessive fees. Maryland’s public service commission last year slapped Viridian Energy with a $60,000 fine after it ran ads promising massive savings (which never materialized) and its reps distributed flyers bearing the logo of the state’s regulated power company, suggesting an association.”
The website Dellea warns: “Beware of Viridian and other green energy providers,” stating that “Viridian claims to offer their customers ‘green power.’ however they are simply power brokers and the alleged green power they are selling is actually someone else’s power; this makes the percentages of green power distribution questionable… Everything seemed to be great until May 2013 rolled along; Viridian’s price per kilowatt-hour jumped up substantially, 3 cents higher than our local electric company to over $0.10 kWh! I was shocked because my electric bill for May was well over $300 (which normally would’ve been just over $200). I figured that it might have something to do with the summer peak season, and my business was keeping me pretty busy so I didn’t have the time to seriously address the issue. I couldn’t believe how Viridian misrepresented the vast savings I would experience while using them! Viridian is supposed to be a wholesale distributor but they actually were charging me much higher rates than the local electric company! Viridian is fraudulent in their practices, not only with their customers but with their associates program as well, and their claims are simply false.”
As I said, I gathered all this information in a quick, 10-minute Google Search. There is presumably a lot more information available to support these claims (and probably plenty to dispute them).
Indeed, according to “City officials defend wind power agreement with Viridian Energy,” a Register-Star article from Thursday, May 16, 2013, questions were raised in the public comments portion of a city council meeting during which Hallenbeck claimed the contract with Viridian “was a no-brainer for us” with savings amounting to “$40,000 a year, $500,000 a decade.”
At the time, according to the article, Victor Mendolia – who went on to run against the mayor in November 2013 – warned the council that questions about Viridian’s methods had been raised elsewhere. He also took the administration to task for the manner in which the Viridian contract was entered into, behind closed doors, without public notice or open bidding, and without even consulting the city’s chief financial officer. Mendolia also predicted exactly what wound up happening – that Viridian would jack up the price one it had lured the city in with a below-market rate.
“It goes against everything I believe in — open and transparent government,” the article quotes Mendolia as saying. “Why was the city’s chief financial officer in the dark about such a large financial transaction? The companies lure you in with a good rate, then the rates jack up. If no one is staying on top, then we’re stuck with a higher rate. Since the treasurer wasn’t in on this, it doesn’t bode well.”
But the simple fact is no one should be surprised that Viridian has apparently ripped off the city of Hudson. What needs to be explained is how the current administration allowed this to happen – how it fell hook, line, and sinker for this service that was already shown to be dubious at best, and what it plans to do about it, to make good to the taxpayers of Hudson who are having to shoulder the burden due to the sloppiness (or inability to manage) the simple task of choosing an electricity provider.
Indeed, as the Register-Star article points out, several thousand dollars of Hudson’s bill is due to late-payment penalties.