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Rising Energy Costs as an Excuse to Add Fees

(For updates click here)

Earlier today I received a phone bill from our phone company (Cavalier). To my suprise they have imposed a new fee of $2.95 called “Energy Recovery Charge” which is:

A charge to compensate the company for rapid increases in energy expenses, fuel expenses associated with network maintenance, and higher related wholesale costs.

Now I understand when a company like UPS imposes a fuel surcharge because that essentially impacts their business – they transport things. But UPS at least links it directly to the price of diesel. An airline might have an excuse to surcharge because they need to buy jet fuel (but they don’t bother linking to the price of jet fuel).

But a phone company??? Their excuse is that they need to pay more for their maintenance people – but this is a CLEC which rents facilities from the regular company. Plus there are plenty of hybrid trucks out there. Also there is no mention of how they calculate the fee either and no letter or explanation – just a charge. I already sent a letter to the state regulator and the FCC. We’ll see what they say.

P.S. With 550,000 residential subscribers and 85,000 business ones (as mentioned here) and fees of $2.95 for residential and $4.95 for business (as published here), that adds up to $1.6 million and $420,000, or a total of $2 million dollars PER MONTH.

P.P.S. And did I mention how misleading these fees make comparison of their plan prices with other carriers?

UPDATE – 08/14/2008: I received a phone call this morning from Cavalier’s regulatory department where my complaint from the Public Service Commission of MD (PSC) has been forwarded. They basically said that they have the right to impose a surcharge by law without asking customers or the PSC first, and when I asked why they did not notify customers with a letter, she said that the footnote in the invoice was sufficient. There was no explanation as to how the surcharge is calculated other than that it is the same for all customers. I should be getting a format written reply from them via the PSC soon. My personal thoughts: had they sent out a letter there may have been a chance that customers would switch to another carrier.

Tags: cavalier, cavtel, energy —

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