Connecticut Officials Ramp Up Pressure To Regulate Electric Suppliers

 Governor Dannel P. Malloy, Attorney General George Jepsen, Consumer Counsel Elin Swanson Katz and Senate President Pro Tempore Donald E. Williams, Jr. (D-Brooklyn) are calling for a package of legislative proposals – the “Electric Supplier Consumers’ Bill of Rights” – that seeks to address the growing number of consumer complaints about spiking prices, deceptive practices and lack of disclosure about rates and contract terms in Connecticut’s electric supplier market.

“Together, we have made it a priority to bring cheaper, cleaner and more reliable energy to Connecticut residents,” said Governor Malloy.

“As a result of that commitment, over the past few years Connecticut consumers have seen electric prices fall after experiencing some of the highest energy costs in the nation.  This past winter, as demand spiked and prices rose, we heard from far too many consumers who complained of deceptive practices and unjustified rate increases by electric suppliers.  That’s why today, we are asking legislators to consider a package of proposals that will arm consumers with better information, allow them to make the choices that are right for them, and crack down on unfair and deceptive practices.  These proposals will give consumers the information, the certainty, and the security they deserve when buying electricity.”

State Attorney General Jepsen echoed the governor’s comments.

“Over the past few months, my office has received dozens of formal complaints and hundreds of phone calls from Connecticut residents who were shocked to find that their electric bills had skyrocketed,” said Attorney General Jepsen.  “It has become exceedingly clear that greater disclosure in the electric supplier market is necessary to protect consumers.  The goal of this legislation is to provide consumers with more information so that they can make the best choices when shopping for an electric supplier and to empower regulators to crack down on deceptive marketing practice within the industry.  Consumers also need much greater flexibility to quickly extract themselves from expensive variable-rate plans and to get back onto standard service, which has proved to be a much better deal for the majority of ratepayers.”

The state Public Utilities Regulatory Authority (PURA) has received more than 1,300 consumer complaints about electric suppliers and aggregators in 2014, according to its complaint scorecard.  Earlier this year, the state’s electric utility companies reported that some suppliers were charging rates well above – in some cases, more than double – the standard service rate of just over nine cents per kilowatt hour.

The proposed bill would require new disclosures consumer and rate disclosures, decrease the switch delay when consumers choose to leave a supplier, impose a three-month fixed-rate requirement in supplier contracts and empower PURA to develop new regulations on sales and telemarketing practices.

“No one should be overcharged for electricity, an essential life service,” said Consumer Counsel Katz.  “Unfortunately, we’ve seen an ever-increasing number of complaints from consumers about being misled, overcharged, or switched from one rate to another without their consent.  I’ve talked with many of the people filing complaints, and the skyrocketing rates we’ve seen from many of the electric suppliers have created a lot of hardship and difficult choices for them.  I glad that today we are presenting a solution that, with the legislature’s support, will make provide more transparency, clarity, and fairness in the electric supplier market.  There should be no surprises for consumers when it comes to electricity.”

“I support strong legislation that will protect consumers against predatory practices that result in higher electric bills, and make it easy for consumers to know the rates they’re paying and to switch power providers when it is to their advantage,” said Senator Williams.

“Deceptive business practices almost always target the most vulnerable populations, and whether hard-working families or seniors on a fixed income, Hartford residents should never have to suffer through an unexpected rate hike,” said Hartford Mayor Pedro Segarra.  “I applaud the efforts of the Governor and Attorney General to protect consumers statewide by holding these third party suppliers accountable.”

“This legislative package will better protect consumers from abusive practices in the marketplace and provide people with the information they need to make smart choices when selecting an electricity supplier,” said Department of Energy and Environmental Protection Deputy Commissioner Katie Dykes.  “DEEP is committed to providing detailed information about options available in the electric retail market at www.energizect.com, and the requirements of this bill will help us make that website an even better resource for consumers.”

The 2014 legislative session adjourns on May 7.

**Download: Fact sheet – Protecting Consumers in the Electric Supplier Market

The AARP also supports regulation of electric suppliers.

“While we have not seen the legislative language associated with the Governor’s proposals, AARP is encouraged by his remarks and his recognition that the third party electric supply market needs to be fixed.  We consider this is a starting point and are hopeful that we can achieve meaningful consumer protections this year.  We are also well aware that the devil is often in the details.  We look forward to reviewing the proposed bill language and sharing it with our members and older residents to ensure that the proposed reforms address the most common issues facing electric customers.  AARP pledges to work with the Governor, and members of the General Assembly, to craft a final bill that offers the strongest possible protections for consumers in the third party electric supply market.

“By now we’ve all heard countless stories from residents about aggressive door-to-door sales pitches, countless violations of the state and federal “Do Not Call” lists, and misleading advertisements.  Even worse is that according to a study released by the State’s Office of Consumer Counsel, the vast majority of those who have switched suppliers in order to save money on their electric bill, have actually paid more than if they stayed with the Standard Offer.  Telling people “buyer beware” simply isn’t good enough anymore.  We must take action to pass real, meaningful consumer protections this year.

“AARP research shows that there is strong support among age 50-plus voters for specific proposals that would crack down on the most egregious practices of suppliers and ensure that consumers who choose to shop in the deregulated supplier market are treated fairly and are paying the lowest rates possible.   Based on our recent survey results and the anecdotal evidence we have collected from AARP members and the general public, AARP is recommending that these practical reforms be included in a meaningful consumer protections bill this session:

  • Place a limit/cap on variable rate plans, such as a percentage increase.
  • Truth in Contracting:  include all fees, not just supply rates in 3rd Party electric supply contracts.
  • Reform door to door sales/telemarketing sales: Must wear id badges, provide written contract, must inform of no harm cancellation period, telemarketers can only contact you once per year.
  • Expand PURA authority:  to ensure plans conform with disclosure requirements, to order restitution to consumers, to order higher bonds to ensure restitution can be paid, to revoke licenses, to enforce customer service standards (such as timely answering of consumer calls).  Resources for enforcement must be budgeted.
  • Pricing Disclosure:  disclose the historical rate for past 12 months, the rate formula that will be followed and whether there is a cap or upper limit on the rate increase, and if so what is the cap.
  • Variable Rates Disclosure & Notice:  For variable rates, disclose the rate charged for the next billing cycle before that cycle begins (on previous bill), all other price changes require 30 days’ notice and affirmative consent.
  • No early termination fees/cancellation fees for any plans.
  • Ensure customers can switch easily to default service by contacting Electric Distribution Company.
  • Prohibit practice of placing customers on variable rate plans when their fixed rate plan expires; if a consumer has not affirmatively chosen a new plan at expiration, they should be placed on Standard (default) Service.
  • Ensure low income customers do not pay more than standard offer rate.”

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2 Comments on "Connecticut Officials Ramp Up Pressure To Regulate Electric Suppliers"

  1. Gerald Delmato | April 16, 2014 at 8:07 pm |

    I’ve always thought of myself as a savvy consumer. That’s until I was solicited by North American Power. I have never seen such outrageously deceptive business practices. After transferring to NAP my cost rose 167% in four short months – from $0.0749 per KWH to $0.1999 from October 2013 to February 2014. Then they had the audacity to solicit me several times more. If anyone knows of a class action being taken I would love to join. And if you receive a mailing from NAP – do yourself a favor and rip it up! North American Power is without question the absolute worst company I have ever dealt with!

  2. Have the same problem. My rate with NAP went from .0699 to .1999 $/kwh within 6 mos. Because I’m on Cl&P budget plan you’re not aware of the rate hike NAP was applying. My bill was constant thru these 6 mos. But now CL&P is jacking my monthly budget from $377 to a whopping $582/mo in order to catch up with the deficit that occurred because of the rate hikes. I did not receive any email or letter for NAP notifying me of the drastic rate hikes to come. Here’s the breakdown of the rate hikes each month that I incurred: Aug (intro) .0699, Sept .0749, Oct .1099, Nov .1299, Dec .1449, Jan-Mar .1999.

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