Experts: Consumers Are Paying More For Power In Competitive Supplier Market
Connecticut residents who purchase their electricity from competitive suppliers pay more than their counterparts who purchase their electricity from Connecticut Light & Power or United Illuminating. That’s according to the findings of two experts hired by the Office of Consumer Counsel.
Susan Baldwin, an independent consultant, and Helen Golding, former general counsel at the Massachusetts Department of Public Utilities, studied the rates being offered in Connecticut and shared their findings with state regulators this week.
They found in CL&P’s territory that about 13 percent of residents using competitive supplies are paying less than the “standard offer,” about six customers — not 6 percent — are paying the same amount, and 87 percent are paying more than the standard offer.
In UI’s territory, about 30 percent paid less and 70 percent paid more than the standard offer.
“The fact that the vast majority of Suppliers’ residential customers throughout the state pay more than if they purchased the Standard Offer suggests that the market is not functioning properly as it is presently structured and regulated,” Baldwin and Golding concluded.
The two found that in September, consumers who used competitive suppliers rather than the standard offer from CL&P paid in aggregate $10.75 million more in just that one month. During a 30-day billing period between December 2013 and January 2014, consumers who used competitive suppliers rather than UI’s standard offer paid $2.96 million more.
The study, which looked at rates between January and September 2013, is considered conservative because it avoids the spikes that occur during the colder winter months.
In addition to the health of the market, Baldwin and Golding also interviewed consumers to find out about their experience with their supplier.
Public Utilities Regulatory Authority Commissioner Michael Caron said at a February public hearing in Milford that the number of complaints has more than doubled from a year ago. He said his staff members sometimes have difficulty keeping up with the sheer volume of complaints.
Baldwin and Golding concluded that “if consumer ‘loyalty’ depends on their confusion, it is not in Suppliers’ interest to educate consumers properly — key information may be buried in fine print, and references to variable rates may be negligible.”
The problem is state law already addresses many of the consumer protections that were raised in their conversations with consumers.
“Complaints about Suppliers’ sales and marketing practices are numerous and concern such matters as slamming, purportedly fixed rates unexpectedly becoming variable, phone harassment, and misleading representations by sales representatives,” Baldwin and Golding testified.
Consumer Counsel Elin Katz has said her office has received many complaints about skyrocketing electric rates from people who “felt they were taken advantage of.” Earlier this month, she pledged that regulators are performing a thorough investigation.
In the meantime, lawmakers are considering legislation that would require additional, prominently printed information on electric bills, including notification of rate increases, date of auto-renewal, and any cancellation fees.
Lawmakers also are seeking to print standard offer rates on every bill next to the applicable private supplier rate, and to require online bills to display the same information as is required on printed bills.
Lawmakers also want PURA to establish an online marketplace where customers can more easily compare all private electric supplier offers and purchase directly through the marketplace. Currently, rate comparison information is already available at the ctenergyinfo.com website: www.ctenergyinfo.com/compare-energy-suppliers