February 4, 2019

Coalition wants to ban residential electricity suppliers

HBJ File Photo
HBJ File Photo
Consumer Counsel Elin Katz says it's time for Connecticut to reverse course on allowing electricity suppliers for residential ratepayers.

Consumer Counsel Elin Katz, long an opponent of competitive electricity suppliers, is calling to ban them from the residential market.

Katz and a group of like-minded supporters, including AARP, lawmakers and others announced Monday that they intend to support legislation that would take suppliers out of the residential electricity market.

If successful, the change would leave Connecticut-licensed suppliers with only the commercial market.

It would be a major change in the supplier market, which was created in the wake of a utility market deregulation law in the 1990s that ended utility ownership of power plants.

"It's time to end this abusive consumer market that has failed our citizens," Katz said.

Suppliers compete to convince ratepayers, often through discounted introductory periods, that they can save money by switching away from their utility's standard offer price for generation.

However, Katz's Office of Consumer Counsel has tracked the overall effect since 2014, concluding that that the majority of residential ratepayers who sign up with an electric supplier end up paying more than the utility's standard offer rate.

In aggregate, residential customers paid suppliers nearly $39 million more in the 12 months ending Nov. 2018 than they would have if they had stuck with their electric utility, OCC said last month.

The number totals approximately $200 million more paid from 2015 to 2018.

"We have some of the highest electric rates in the country," Katz said. "We don't need to add another $200 million on top of that."

Officials from the Connecticut Retail Energy Supply Association did not immediately respond to a request for comment Monday morning.

The Massachusetts attorney general has proposed a similar ban. Connecticut House lawmakers passed a bill banning electricity suppliers a few years ago that ultimately didn't become law.

The Connecticut draft legislation introduced Monday would eliminate supplier contracts for residential customers and would also create a new standard-offer tier for green energy, Katz said.

Lawmakers and regulators here have cracked down on suppliers in recent years, banning variable rates in the residential market, scrutinizing disclosures and billing design, and fining various suppliers millions of dollars for abusive marketing practices, impersonating utility employees, and signing up ratepayers who did not consent (a practice known as "slamming").

Suppliers have seen their residential market share fall since a 2012 peak of 45 percent to somewhere between 24 and 30 percent as of November, according to OCC and regulator data.

Lawmakers who spoke in favor of the ban Monday included U.S. Sen. Richard Blumenthal and former Sen. Len Suzio (R-Meriden), who has publicly tussled with his supplier and utility over incorrect amounts on his bill.

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