Alternative Electric Suppliers In Ct Have Difficulty Matching New CL&P, UI Rates

Arthur Michael of Middletown is among the first of tens of thousands of Connecticut residents who will soon be rethinking whether to continue receiving their electricity from alternative providers or return to CL&P and UI – the two major electric companies in the state.

With the new reduced rates that the huge companies instituted this year, alternative suppliers will have difficulty this year competing with UI and CL&P.

Michael tipped me off about the issue recently telling me that six month ago he signed up with Energy Plus when its rates were substantially cheaper than CL&P’s.

However, when he recently compared his bill to his mother’s, who receives electricity from CL&P, he discovered he is now paying a higher rate than the standard CL&P offer.

“I noted that on our electric bill for December, Energy Plus’s rate had JUMPED to $0.139871. I checked my Mom’s bill and she was billed $0.1105 per KWH for the same period. I noted that for the entire year of 2011, CL&Ps’ Rate 1 is $0.09482 per KWH, 4.5 cents below the December rate charged by Energy Plus!!!!!!!!!”

“Today I cancelled Energy Plus and requested return to CL&P.”

Paul Frantz, chief marketing officer for Energy Plus, candidly confirmed that his and other smaller suppliers will have difficulty competing with the new standard rates.

“This year utilities are living off their low costs from last year, next year their price will go up,” he said. “Right now our rates are higher than UI or CL&P.”

Energy Plus, with 40,000 (mostly residential) customers in Connecticut, purchases electricity on a daily basis while the two big firms purchase long term contracts that are layered and hedged.

CL&P and UI, Frantz said, can offer lower rates this year because the price of natural gas and the cost of electricity went down last year. But in 2012 the costs will rise dramatically for the major and reduce for his company and other suppliers.

Weather – long stretches of cold or high heat – boost the price of natural gas, the main ingredient that determines the cost of electricity.

Connecticut Attorney General George Jepsen suggests that consumer check state internet sites (listed below) to make sure they are getting the best deal.

“Having a choice of energy suppliers is a good thing if it can help Connecticut customers save on their electricity bill,” said Jepsen in response to CtWatchdog’s request for a comment. “But first customers need to make sure they know what they are purchasing and find the product that best fits their needs,” Jepsen said.

The state Department of Public Utility Control website has information that can help consumers compare offers.  You will see 32 separate offerings for competitive energy for CL&P residential rate. Check here.

Some of the offers are fixed for a term (six months, a year, etc.) and some are month- to- month rate plans. Still others are month-to-month variable with a price cap. Overall 18 of the 32 separate offers are for variable priced electricity.

“The important thing for customers is to be educated,” Jepsen said. “Variable-priced offers may over the long term be cheaper for customers, but they can be volatile and the price tends to rise during peakusage months of summer and winter.”

Customers can learn more about electricity pricing and questions to ask suppliers at http://www.ctenergyinfo.com/dpuc_questions_to_ask_supplier.htm.

Franz says his company has a variable rate, that can increase or decrease on a daily basis, even though they try to keep prices steady for at least a month.

He said his company clearly does not guarantee sayings but says it has an excellent reward loyalty point program and “great in-house service.”

“We tell customers to look for long run. In 15 out of 18 months we saved people money.”

Ed Geraldi of Farmington has another electric supplier issue, claiming he was cheated.

He claims that Positive Energy – which is under investigation by state public utility regulators for a whole host of issues, wrote me that he believes he was charged a higher rate than what Positive Energy claimed was its rate.

“I called them and brought this discrepancy to their attention,” he wrote me. “I spoke to Joanna in their customer service department she did some research agreed it was an incorrect rate. I did some research myself and found they charged me a wrong rate for the months of August, Sept. Oct and Nov. besides Dec. They were only willing to send me a refund check for Nov and Dec ’10 in the amount of $10.86. They would not make any additional refunds for any other months.”

Joseph Ventura, ceo of Positive Energy, says he is looking into the matter. Ventura is also being sued by the state attempting to collect a $100,000 fine the state banking department imposed on him for bank fraud.

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9 Comments on "Alternative Electric Suppliers In Ct Have Difficulty Matching New CL&P, UI Rates"

  1. I would like to provide CT residents with a legitimate alternative. http://www.DiscountPowerForYou.com. We offer a variable rate for residential customers HOWEVER, we have a cap on our rate so excessive prices are not possible. If you have any questions, please feel free to call (860) 614-2870

  2. Link is incorrect – should be

    http://www.ctenergyinfo.com/display_rates.htm

    The underscore was translated to %20 which translates to a space

  3. Connecticut Energy has a low rate in CT for Energy…

  4. what is the going cost for conservation? is that also on the rise, or would it go down when oil and gas become a rarefied commodity as well? this country and others must plan far out, farther than the short term mindset of profiteering entrepeneurs seeking a living from exploitation of our current energy glut.

  5. greenrock76 | January 25, 2011 at 3:00 pm |

    I have an eleven month contract with Con Edison that starts this month where I pay 8.49 cents per KWH.

  6. George Gombossy | January 25, 2011 at 3:45 pm |

    Your article “Many alternative electric suppliers now have rates higher than CL&P, UI” quoted Paul Frantz from Energy Plus as saying “This year utilities are living off their low costs from last year; next year their price will go up,”. I do not believe that his statement is accurate, in fact the price of utility “Standard Service” has been consistently, and predictably declining. It is important that all customers of UI and CL&P understand the options that are available so that they can make informed decisions when choosing electricity providers.

    Connecticut law requires electric utilities to manage price risk by purchasing power in advance of need at different periods, such that the final rate is a blend of forward prices from different points in time. This concept is commonly called “laddering,” and the purpose is to provide price stability and prevent electric rates from running up as sharply as gasoline and oil prices sometimes do. This is analogous to a heating oil customer “locking in” a price for winter oil deliveries from an oil dealer before the winter. However, instead of locking in a price once, the utilities lock in prices several times, with each purchase typically locking in prices for 10% or 20% of the future power supply need, until 100% of the power for the future delivery period is purchased. When market prices rise, laddering helps mitigate customers’ exposure to the high market prices. This is why utility Standard Service rates remained relatively stable in 2008 while oil and gas prices peaked. However, when market prices fall, as they have been doing since mid-2008, Standard Service rates will not fall as quickly as market prices. Competitive suppliers are not bound by the statutory laddering requirement, and are able to purchase power in shorter term markets, which allows them to achieve a competitive advantage when prices are falling.

    Power prices in New England have been on a steady decline since mid-2008, but now appear to be stabilizing. On January 1, 2011, some of the utilities’ older “laddered” purchases expired, and were replaced with more recent purchases made at lower prices. This replacement of older contracts with new, lower priced, contracts led to a drop in Standard Service rates on January 1. Based on current market conditions, it is expected that the same thing will occur on January 1, 2012, and that Standard Service prices will drop to below 2011 levels.

    Lastly, it is important to note that Connecticut’s electric utilities are not allowed to earn any profit off of the power we purchase for customers. We encourage customers to consider all offers that best meet individual needs. CTEnergyInfo.com is a great website that lists current offers from suppliers. Many of these suppliers offer both fixed and variable rates designed to meet specific customer needs, and for those customers who chose not to choose, UI and CL&P will make sure the power is always available.

    Tony

    ___________________________________________

    Anthony Marone | Senior Vice President Business Services | The United Illuminating Company

  7. Connecticut needs to rethink the entire travesty of electricity deregulation which has been an abysmal failure. We got sold down the river in 1998 and now are paying dearly for it.

    please check out these excellent articles and demand our legislatures fix this busted system.

    The Failure of Electricity Deregulation: History, Status, and Needed Reforms by Tyson Slocum
    http://www.ftc.gov/bcp/workshops/energymarkets/background/slocum_dereg.pdf

    The Failure of Electricity Deregulation
    By Marjorie Kelly and Richard Rosen
    http://www.pulp.tc/html/the_failure_of_electricity_der.html

  8. George Gombossy | February 13, 2011 at 1:52 pm |

    Hi George

    I thought I would give you a further update on this company. Since I was dismayed with the rate they gave me I changed electric suppliers. Well my Dec ’10 bill had a rate of .0999 which they admitted was a wrong rate. Well my January bill has come and my new rate from Positive Energy is now .1039. These are both from Positive Energy. It takes about six week to change from one supplier to another. I am going to call them up and ask them why. I just called them and first I asked what is the current rate for an existing customer. The rate is .0947. I then identified my account and asked why is my rate now .1039 The answer was there is an error on the account. No other explanation is given. They took my information and said a supervisor would be calling be back. If you would like I can email you copies of my bill to verify the rates.

    Regards,

    Ed Gelardi

  9. COMPETITION IS GOOD! – MONOPOLIES ARE NOT GOOD!

    Wouldn’t you agree? – Do your homework.

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