Need some advice on a situation here in San Antonio. Client signed with an energy broker 18 months ago who guaranteed "locked rates" for 3 years with CPS Energy territory suppliers. Contract clearly states fixed rate of 8.4 cents per kWh. Now they're getting bills with rates varying from 9.2 to 11.6 cents. Broker claims market conditions allow for adjustments. This smells like breach of contract to me. Anyone dealt with similar situations?
Broker promised "locked rates" - now rates are floating
Jorge, that's definitely breach if the contract says fixed rate. I'd have your client demand a copy of the actual supplier agreement, not just the broker's summary. Sometimes brokers sign clients up for variable rates despite promising fixed rates. Here in Kentucky I've seen this exact scenario multiple times. The devil is in the actual contract language with the supplier.
Frank's absolutely right about getting the actual supplier contract. I had a similar case in South Carolina where the broker contract said one thing but the supplier agreement had different terms. Turned out the broker never actually secured the fixed rate they promised. Client had grounds for both breach of contract and misrepresentation. Document everything and consider legal action if the damages are significant.
Thanks Frank and Flo. Client is pulling all the paperwork now. The broker is being evasive about providing the actual supplier agreement, which is raising more red flags. Total overage so far is about $18,000 based on the promised vs. actual rates. Client's attorney is getting involved. This is exactly why I warn clients about broker relationships that seem too good to be true.
Jorge, $18K is definitely worth fighting for. Here in Louisiana I've seen brokers try to hide behind vague "market adjustment" clauses that weren't properly disclosed. If the broker can't produce the supplier agreement immediately, that's a huge red flag. They should have provided that at contract signing. Your client may have grounds for rescission of the entire agreement.
This is unfortunately becoming more common as energy markets get volatile. The key is always in the contract language - "fixed" should mean fixed, period. If there are adjustment mechanisms, they need to be clearly disclosed upfront. Jorge, I'd recommend your client file complaints with both the state attorney general and the utility commission. These regulatory complaints often get faster results than just threatening legal action.