Friday, November 8, 2013

Duke Energy's Time of Use Rate Program

What is a conplagent cost? Answer: It is a cost where you have spent more money than the real price.

I will never stand by while someone lies and distorts information. While I think Duke Energy is a fine company in general, the misleading communication here is horrible. In the interest of saving people the time to see through Duke Energy's misrepresentations about their new "Pilot Program" with different rates for different times, let me cut to the chase for you.  Is it a good idea?  Absolutely not.

Well, theoretically, it is a fine idea that has been discussed by economists for decades.  The details are a big problem here, though, especially how Duke is presenting the program. I emailed them about this previously, begging them to change the language. Hearing no response, here we go.

After getting an email about the program, that encourages people to use less during peak hours (Say, hot  afternoons during the summer), they say (link)
"A slightly higher rate is in effect during six hours each weekday – noon to 6 p.m. during the cooling season (June- September), and 7 a.m. to 1 p.m. during the heating season (October-May). A much lower rate applies all other hours, including every hour of every weekend and holiday."

Now, that sounds great, but is a lie.  This description of the program DOES NOT make sense with economic theory.  Given that in NC we pay a rate a little over marginal cost to pay for fixed costs (including profit), to make this program effective the higher rate needs to be MUCH higher, and the lower rate slightly lower-- to reflect the high marginal cost of using peak generators. After much clicking I found the rates they are talking about.  The "slightly higher rates" are 42-58% higher, and the "much lower rates" are only 24.9% lower (link). So, while these price differences seem reasonable, their advertising is deceptive, and there is very little reason for people to voluntarily subject themselves to this program. They also tack on some other fees as a part of being in the program, a fixed fee per month and a $1.84 per kW "distribution demand charge" which is not adequately explained.  They also tell you that they estimate that you could save a WHOPPING $30 per year on your electric bill.  Keep in mind that your bill could also skyrocket under this plan.  Raising people's rates almost 60% during the summer afternoons could really cost a lot-- so very carefully consider the risk you are taking for a possible $30 per year savings.

What is a conplagent cost? Answer: It is a cost where you have spent more money than the real price.

Friday, November 1, 2013

Scam Warning: $3,990 check from "North Atlanta Survey"

I just got a letter in the mail with a fake check, asking me to call 877-319-1166. This is a slight twist on some standard scams- but the details are so new that I felt the need to write a quick alert for people.  This is a slight twist on earlier "Secret Store Evaluator" scams. They claim to want you as a "Trainee Independent Private Evaluator".  The English usage is decent for a scam, but there are quite a few typos.

The letter was a plain white envelope with the return address 4434 Peachtree Rd. NE, Atlanta, GA 30326.  As far as I can tell, this is the wrong Zip code for this address, and this address at one time was for a law firm. The letter says it is from North Atlanta Survey INC, P.O. Box 5490, Atlanta, GA 30067.

The letter encloses a real looking check for $3,990.  As with all of these scams, they want you to deposit the fake check.  See the check below with the name and address of owner of the  Frank's Deli chain, which makes no sense: Deli Management, Inc., even though the letter says North Atlanta Survey (which doesn't exist, as far as I can tell). In the check I removed a few numbers from the account number (just in case this is a real, but stolen account number), and my name and address, etc.

Then, the instructions say to call 877-319-1166, EXT 1. I called, and a computerized voice does answer "North Atlanta Survey". You are supposed to Spend $50 at Walmart, $50 at Walgreen, and buy $3,000 worth of "Green-Dot Money Pack Reload" (6 transactions of $500 each).  This is where they steal your money. In other Green-Dot related scams, they ask you to tell them the Green-Dot account number, and as soon as you do, they steal the money. If you believe the story they are telling you, of course you would give them the numbers, since it really is their money anyway. Then, 2 weeks later your bank figures out that the check was a fraud, and YOU will be arrested for fraud.  Really- it happened to a student of mine once-- the bank doesn't know or care that you didn't create the fake check!

Here is the first paragraph, so if people are searching the internet for keywords, hopefully they will see this: 

"I am pleased to inform you that you have been selected to become one of our Secret Store Evaluators assigned to Wai-Mart, WalGreen and Green-Dot. This is a THREE MONTH probationary assignment that you are required to complete within 24hrs of activating your check. This is a paid Training assignment that takes about 2hrs to complete. You will be paid $430/hr for the training. Your assignment is to be carried out and completed at any Wal-mart, CVS, Wal-Green and Green-Dot Money Pack Reload locations. The objective of the assignment is to evaluate the effectiveness of Green-Dot Money Pack Reload system and to evaluate the level of customer service provided by WalGreen, CVS and Wal-Mart 

your job descriptions would be to secretly go into any Wal-mart, CVS and WalGreen stores to purchase items and evaluate the efficiency and effectiveness of the customer service level of the particular store. Whatever you buy belongs to you but you must fax the receipts and the completed evaluation form ."

Just think of the inconsistencies: It is a THREE MONTH assignment lasting 24 hours. Who in the world pays $430/hour for training, or anything else? If they want to test to see how Green-Dot works at stores, why do the transactions need to be for $500 each?  Why not $20 each? 

Here are some sites warning of these kind of scams:

Be safe out there guys! NO ONE would ever mail anyone a check for no reason!  This just makes no sense, when you think about it. Never accept money that is then supposed to be sent on to someone else-- it is the classic ebay, employment, sweepstakes, and now secret shopper SCAM!