Q:

Is Direct Energy a scam?

A:

Quick Answer

There is no evidence suggesting that Direct Energy is anything other than a retail energy marketing business. While it is one of the best established, there are many companies with similar goals and functions. However, the deregulation in the American Northeast has made it more beneficial for energy marketing organizations to operate across in a large number of markets.

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Full Answer

Like other retail energy marketing companies, Direct Energy offers its customers a secondary option to the existing power company in the markets in which it operates. This means that, rather than being forced to accept services from a single organization, customers have the option of contracting with an energy marketing company instead. These companies act as cooperative groups, using the leverage of their clients to negotiate lower rates for various forms of energy, from gas and propane, to electricity from the power grid. This is only possible in select markets where the power grid has been deregulated from municipal control and the monopolizing interests of single utility corporations such as Duke and others. The greatest benefit is often to rural customers who fall outside the jurisdiction of municipal providers, left with only one choice for their daily electrical needs. While it may not always be worth it to contract with these companies, what they do is a legitimate business which helps diversify the energy market.

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