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AARP Calls For Tougher Restrictions on Third-Party Electric Suppliers

by Hugh McQuaid | Mar 31, 2014 12:57pm
(1) Comment | Commenting has expired
Posted to: Energy

Hugh McQuaid Photo

Nora Duncan

Connecticut AARP released a public opinion poll Monday to remind elected officials that the state’s 50 and older population wants to see restrictions on third-party electric suppliers passed during this election-year legislative session.

It’s an issue that legislative leaders signaled early on would be high on their priority list this year, but at a Monday press conference, Nora Duncan, state director of the AARP, said advocates have not yet seen a formal proposal.

“We think it’s just time to make sure that we come out strongly with our opinion research because we haven’t seen any formal language,” she said. “We’re confident that we’re still going to be able to pass strong consumer protections. But now we have public opinion to back that up.”

The group polled 800 Connecticut residents age 50 years or older during a week in mid-March and found that 88 percent were concerned about rising electrical costs and 71 percent felt their elected officials weren’t doing enough to help on the issue. Meanwhile, 51 percent said the issue will influence how they cast their votes in the next election.

The poll and press conference were designed to prod lawmakers toward crafting policies aimed at third party electricity companies, who the group’s advocacy director, John Erlingheuser, said lure customers in with aggressive marketing tactics and promises of lower fixed rates.

But Erlingheuser said the confusing contracts often include fine print allowing the companies to switch customers to more expensive variable rates after a short amount of time. To illustrate the complicated nature of the third-party utility market, AARP brought in Wilhelm Gauster, an Avon resident and retired physicist who worked briefly in “rocket science.”

Gauster said he signed on with a third party supplier at a lower fee but after a year had passed he was switched to another rate. In two months, the increased cost of the new rate had more than eclipsed the money he had saved under the first contract.

Hugh McQuaid Photo “In spite of my fairly extensive scientific background, I had a hard time really dealing with this system of electric utilities,” he said. “. . . To me this really doesn’t make sense. You shouldn’t have to make a major part of your life just keeping track of your electric utility bills.”

AARP is asking lawmakers to approve legislation requiring electric suppliers to disclose all the costs and fees included in their contracts. They also are seeking restrictions on electric suppliers’ marketing practices, like preventing them from contacting a customer more than once a year and governing how salesmen interact with potential customers.

“There are things that are common sense. We’re not looking to do radical things. We’re asking people to actually do what makes sense for consumers,” Erlingheuser said. “We’re asking public officials to heed the calls of our members . . . and take the opportunity to actually put in place strong protections, not just some window dressings so people can say we’ve done something.”

The proposals are similar to those outlined by Democrats in January as part of their agenda to improve the quality of life for the state’s seniors. However, when the legislature’s Energy and Technology Committee passed the bill this month, it was mostly limited to asking regulators to conduct a study on the topic.

Adam Joseph, a spokesman for Senate Democrats, said the bill is a work in progress and will be more than a study bill before the end of the legislative session in May.

“Transparency in electric rates is a top priority in the caucus. Beyond rate transparency, we’re working to address a number of consumer protections related to electric rates,” he said. “This a top priority of ours. We’re working with a number of stakeholders to produce a bill.”

Duncan said she is still optimistic and believes AARP has the support of many lawmakers. She said she thinks Gov. Dannel P. Malloy also wants to see strong reforms passed this session.

“We just want to make sure they are as strong as possible and as effective as possible so we don’t leave this legislative session with Bandaids instead of real fixes,” she said.

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posted by: richsobi | April 1, 2014  8:10am

It is time to eliminate the variable rate.  Make the competitive suppliers offer a fixed rate contract for at least six months similar to the standard offer of CL&P and UI.  This will eliminate the teaser (sucker) rate that is offered for a month or two, which is then followed by large unannounced rate increases.