Beware of Energy Scams

Electric co-ops invest millions of dollars every year into researching the latest energy efficient and renewable energy options on the market.

Today, energy efficiency is on the minds of millions of Americans. Electric bills are rising due to pressure on wholesale rates from environmental regulations, the need for additional baseload generation capacity, and the rising cost of fuel. It’s easy to see why marketers have targeted consumers who are searching for the proverbial “silver bullet” of energy savings.

This is why Michigan electric co-op members are cautioned to look before they leap when responding to print, broadcast, or internet ads promising electric bill savings from plug-in or wire-in power conditioning devices. When the ads also promote do-it-yourself installation involving exposure to dangerous high voltage and possible electric meter tampering, it’s time to use common sense and seek advice.

Dangerous and Illegal
A pocket-size, seemingly innocuous item sold online—called the RPU-190—falls into this grouping. Engineers agree there’s no doubt that, as promised, this $200 piece of copper wire will cut a homeowner’s electricity bills in half. The catch is that attorneys and municipal and state authorities nationwide also agree that installing such a device is against the law because it requires tampering with a meter and stealing power from a utility.

“I’m concerned that people could be taken in by this thing pretty easily,” says Thomas Suggs, vice president of engineering for Middle Tennessee EMC in Murfreesboro. “The safety aspect jumped out at me immediately.”

While Suggs says he has never before noticed such a product for sale, he has seen customers try to bypass electricity bills by jamming copper tubing, 16-penny nails or a kitchen fork into the meter tabs.

Suggs began researching the RPU-190 after a colleague forwarded him a link to the product’s website in January. While online, he was alarmed to find a promotional video featuring a young woman clad in shorts, a T-shirt, and lineworker’s gloves, pulling out the meter and inserting the RPU-190 into the meter. That enables the installer to create a circuit that bypasses one of two “legs” of power flowing into a home.

The video failed to warn viewers about what Suggs and all qualified engineers know. Power surging through a compromised meter can cause an electrical catastrophe. Furthermore, a short circuit could produce an arc flash bright enough to cause temporary blindness, hot enough to melt metal, and powerful enough to launch fragments of shrapnel-like debris.

“Anytime you get into those meter bases, you’re running a risk,” Suggs says. “With an arc flash, somebody could get hurt or killed.”

Suggs wasted no time acting. The video was removed from the website after Suggs contacted Electric Hero, the San Diego company marketing the RPU-190. Also, numerous webmasters removed the product from their websites once Suggs alerted them about its hazards via Internet bulletin boards. Suggs also used e-mail to inform other electric cooperatives about potential problems with the product.

His diligence piqued John Ohlhausen’s attention in Hondo, TX. Ohlhausen, manager of engineering services for Medina Electric Cooperative, opted to be proactive and order an RPU-190, just in case co-op members had questions.

“We wanted to have one on hand, study it, and be knowledgeable about it in case questions arose,” Ohlhausen explains, adding that it was painfu l to spend so much money on what he suspected was a hoax. “This way, members can take a look at it before wasting their own $200 on something they can’t use legally.”

The product arrived in a manila, bubble-wrap envelope with a simple return address of Maitland, FL. Ohlhausen describes it as a poorly constructed copper shunt coated with black insulated paint. It offers minimal resistance and no energy storage capability, he continues, adding that poor construction puts its worth between $15 and $20, at most.

“Most credible products have a return policy, but there was no evidence of one with the RPU-190,” Ohlhausen says, adding that the package also included a hand-labeled amateurish CD with vague installation instructions with regards to safety.

The “Frequently Asked Questions” section of the Electric Hero website offers readers a series of 11 evasive, circuitous, and nonsensical answers. For example, the answer to “Am I stealing electricity?” is “No, you are simply changing the flow of energy through the power lines into your house from an unstable current to a stable one.” The response to “Is it legal?” is “Yes, installing the RPU-190 correctly is not illegal.” And the answer to “Will the electric company fine me for use of this product?” is “No, the only way the electric company can determine the use of this product is if you stop paying your electric bills or install it improperly, damaging their equipment.”

The emails Suggs exchanged with Electric Hero deteriorated rather quickly when a company representative asked Middle Tennessee’s legal department to “forward us the law stating what you said to be illegal and how you would pursue that.” That same e-mail, full of misspellings, ended with a personal dig at Suggs: “I bet since you are th (sic) VP you are getting one heck of a end year bonus like all other manufacture (sic) have this year.”
Nobody at Electric Hero responded to a reporter’s recent phone calls and emails requesting comment about the RPU-190.

A disclaimer on Electric Hero’s website stated: “We WILL NOT answer emails from anyone asking about illegal activities, or how to use our products for illegal activities. They will be automatically deleted.”

Deceptive and Ineffective
Numerous products fall into the “deceptive and ineffective” category. One to achieve significant notoriety is the Xpower Energy Saver. Forum Trading, Inc., was collaborating with several other companies to sell a $200 cylinder they claimed consumers could plug into the wall to trim electricity consumption by 25 percent, and extend the life of household appliances.
Texas Attorney General Greg Abbott issued a temporary restraining order against Forum Trading’s sales last spring, and the case is scheduled to go to trial later this year. Texas-based Forum was selling Xpower through a multi-level marketing scheme, Abbott said.

“With Texas families focused on energy prices and seeking cost savings, these defendants are promising lower electricity bills but failing to deliver,” Abbott said in ordering a halt to sales. “Experts who reviewed the defendants’ products discovered no actual savings for well-intentioned purchasers.”

Engineers at the University of Texas at Austin concluded that the Xpower could produce no more than a 0.06 percent reduction in electric use in an average house. Laboratory tests revealed that the product is an ordinary capacitor. Capacitors are usually employed in electronic circuits to store energy or differentiate between high- and low-frequency signals.

Unfortunately, it’s a “buyer beware” world with all of these devices, says Dan Greenberg, an associate director at E Source. The Boulder, CO-based organization provides independent research to utilities, major energy users, and others in the retail energy marketplace.

“A lot of these salespeople make unrealistic claims for energy savings,” Greenberg says. “They might not even know their claims are unrealistic because the distributor or vendor believes claims from the manufacturer that aren’t true.”

“It’s so important for consumers to be skeptical,” Greenberg emphasizes. “They really should check in with their co-op before making any purchase.”

Generically, Greenberg says, the legal but rather ineffective devices such as Xpower promise to “fix up” a consumer’s power in some way. The device likely won’t harm anything, but nor will it save the buyer a noticeable amount of money on his power bill.

He warns potential customers to be leery about energy-saving promises from vendors of products that use capacitors to improve power factor. Power factor is simply a measure of efficiency with which the power is being delivered by the distribution system.

No “Silver Bullet”
Saving energy is not as simple as plugging a device into an outlet or a meter. Electric co-ops invest millions of dollars every year into researching the latest energy efficient and renewable energy options on the market. Many co-ops offer energy audits, weatherization programs, rebates and other assistance to member-owners seeking answers about energy efficiency.

In today’s economic climate, marketers have found a niche offering a range of products that they promise will deliver quick and easy energy savings. The soundest advice to follow in this climate is “buyer beware.” Instead of wasting money on schemes that fall short, co-op member-owners looking for answers are encouraged to work collaboratively with their local electric co-op.

Elizabeth McGowan is an energy journalist with Energetics, Inc., in Washington, D.C., and writes for the Cooperative Research Network’s (CRN) Tech Surveillance.

CRN is a service of the National Rural Electric Cooperative Association that monitors, evaluates and applies technologies that help electric co-ops control costs, increase productivity, and enhance service to their consumer–members.

Reader Comments

  1. Wow. I thought that power factor corrections scams were out of control, but outright shunting power meters and breaking the seal to get in and ignoring the legal warning stickers?

    It is most unfortunate though that there are so many energy saving scams out there ( I review many of them at http://www.nlcpr.com/Deceptions1.php) and even when they get reported via the FTC complaint assistant, nothing changes. Some of the more amazing ones actually end up with Federal funding due to lobby efforts (see: http://www.nlcpr.com/Deceptions3.php) . Certainly, improved science education in the schools would make scams harder to sell, but what is really needed is enforcement activity.

    I am also amazed how the mainstream media reports press releases as if they were news, and will never say the word scam or fraud lest they be sued. About the worst they can say is that “if it works we might have to rewrite the laws of physics”—and neglecting to qualify that remark with how extremely unlikely that scenario is. News organizations should back their reporters and allow them to take calculated risks—e.g. that a perpetual motion machine that can power your house is a scam and that even if sued (unlikely), you will not lose in court.

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