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30,000 Connecticut residents still have banned electricity deals

  • Jan 31, 2020
New Haven Register

Jan. 31--Nearly 30,000 Connecticut residents are still on variable-rate contracts with third-party electrical suppliers, even though the state outlawed the practice in 2015.

But because of the way these contracts are worded and because they were signed before variable-rate contracts were outlawed, it's all perfectly legal the way things currently stand, according to consumer advocates and state Attorney General William Tong.

And while there are options to get out of the contracts, the third-party suppliers don't make it easy, said John Erlingheuser, AARP Connecticut's advocacy director.

That was one of the key takeaways from a Thursday press conference at the Legislative Office Building in Hartford that was organized by Connecticut AARP and attended by Tong and several lawmakers. The event was held a week before the General Assembly opens its legislative session on Feb. 5 and some lawmakers said they want to change the laws governing third-party suppliers and make then even more stringent in terms of protecting consumers.

State Rep. David Arconti, D-Danbury, who House chairman of the Energy & Technology Committee, said stronger consumer protections are needed for electric customers.

"For far too long, regulatory policies have attempted to address third-party suppliers' issues that have been negatively impacting consumers statewide," Arconti said. "I stand in support of Connecticut consumers who deserve a clear understanding of charges and surcharges on their utility bills. Our legislative committee is committed to working with all parties involved and finding alternatives to the many concerns that have been raised."

One of the legislative options being discussed is "eliminating termination fees which keep people from switching," he said.

Erlingheuser said Connecticut consumers using third-party electric suppliers paid an estimated $200 million more than consumers on the electric utility standard service between 2015 and 2018.

"A lot of people enter into these (variable rate) contracts and think it's set it and forget it," Erlingheuser said. "They don't understand that with a lot of these contracts, you got to pay a lot of attention to them in order save any money at all."

Officials with the Retail Energy Supply Association, a Pennsylvania-based trade group that advocates for competitive retail energy markets, were not immediately available for comment,

Elizabeth Benton, a spokeswoman for Tong, said it was a legislative decision when the variable-rate ban was passed not to make it retroactive.

Erlingheuser said a consumer still under at third-party variable-rate deal has three options.

"The way the contracts are structured, the consumer has to actively take action and let the third-party provider know that you want to end your contract. It may cost you some money in terms of an early cancellation fee. You can also ask the supplier to renegotiate or request that you be allowed to go back to standard service."

Standard service customers let the state's two legacy utilities, The United Illuminating Co. and Eversource Energy, purchase generated electricity for them rather than buying it through a third-party provider. The charges associated with standard service are essentially pass-thorughs, meaning the utilities are not allowed to charge customers more than what it costs the companies to purchase the electricity.

Erlingheuser said the legislature needs to pass ban on auto-renewals of contracts with third-party suppliers, which currently is allowed under state law.

Arconti said for this upcoming session, the Energy & Technology Committee is working on legislation "to address many of the concerns that have been raised, including more oversight by PURA (the Public Utilities Regulatory Authority) and allowing them to order restitutions to customers."

A new survey released Wednesday by AARP found the vast majority of consumers 50 years of age and older who were surveyed are concerned about their electricity costs increasing. They also support stronger consumer protection measures against abuses from third-party electric suppliers.

Tong said he is involved in the effort to reduce electric costs for residents because it his job "to protect consumers from unfair and deceptive practices."

"This is not something that we can live without," he said of electricity.

State Sen. Matt Lesser, D-Middletown, said among his constituents, "there is not one issue that people are more fired up about than the high costs of electricity in the state."

"There a reason for that," Lesser said. "For too long laws have been written to benefit special interests and not the people. People have been hoodwinked into paying more for electricity than they have to."


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