🔒CBIA says electricity supplier’s ‘unethical’ practices left business customers with higher energy bills

[Due to a web error, this story was missing its lead paragraph when it was published online Monday]

Connecticut's third-party electricity suppliers have been in the headlines plenty in recent years, as state regulators probed their business practices, levied fines against some of them and ultimately voted to ban variable-rate contracts and mandate more transparency.

Virtually all of that hubbub stemmed from the residential market, where some homeowners complained they were shocked by high bills that resulted from variable rates in periods of high demand, such as a polar vortex in early 2014.

Business customers, however, have not had many public spats with retail electricity suppliers, but a significant one has bubbled to the surface.

A relatively small supplier hailing from Massachusetts has ruffled the feathers of the state's largest business advocacy group, the Connecticut Business & Industry Association (CBIA), which also runs an electricity aggregation service for its members, helping them secure contracts with suppliers that aim to lower costs and provide more cost certainty.

In mid-January, CBIA petitioned the Public Utilities Regulatory Authority (PURA), asking it to investigate Mint Energy LLC over alleged deceptive business practices that CBIA says resulted in higher costs for several of its customers, as well as hard feelings and a few lost members.

CBIA — which serves about 1,000 customers per year through its Energy Connections arm — says it has never had a problem before.

“In serving our customers for over 18 years, we have never encountered any issue within this network of licensed suppliers that warranted registering a formal complaint with PURA,” the petition states. “However, our experiences with Mint, and its continued mistreatment of our customers, necessitates this formal action.”

The dispute

CBIA's PURA petition reads essentially like a contract dispute.

Specifically, CBIA says its Energy Connections service and its energy supplier management partner, USource, placed 80 member-clients last April into supplier contracts with Mint, at an agreed upon price of 8.5 cents per kilowatt hour. However, right before the contracts were set to kick in last December, Mint said it would not honor 65 of those deals, CBIA said. Instead, Mint offered a new, higher price of 11 cents per kilowatt hour for those customers, CBIA said.

Mint attributed its actions to “changes in the energy marketplace that would render those [original] contracts unprofitable” to the company, according to the petition.

CBIA scrambled to find a new supplier, but its affected members ended up with higher rates than they budgeted for under the original Mint contract, CBIA said.

CBIA estimates that the higher-priced contracts cost its members an additional $313,400. It called Mint's practices “unethical” and “oppressive.”

Mint also changed contract terms for four other CBIA clients, whose deals were already active, CBIA said, costing them tens of thousands of dollars extra.

It does not appear that CBIA or any of the aggrieved businesses have sued Mint in state or federal court. CBIA declined to be interviewed for this story.

In an email, a Mint representative characterized CBIA's concerns as a difference of opinion it aims to resolve.

“Mint Energy has reviewed the petition filed with the PURA, and views the issue as one regarding differing interpretations of contractual terms between experienced business entities,” the company said. “Mint will vigorously defend these claims in an effort to reach a swift resolution to this issue.”

The Office of Consumer Counsel (OCC), which advocates for consumers broadly and with regard to energy issues, as well as the state Department of Energy and Environmental Protection are parties to the contested case, as required by state law.

Joseph Rosenthal, a principal attorney at the OCC, said the agency would follow the case as it proceeds “and try to advocate that justice be done on behalf of the consumers involved.”

There are more than 70 aggregators, that, like CBIA, are licensed to operate in the Connecticut electricity supplier market, most of them for commercial customers, according to PURA.

“Very unusual” case

Originally licensed in late 2010, Mint Energy has only had one complaint lodged against it during that time, not counting the pending petition. In 2017, a Waterford Dunkin' Donuts franchise owner complained of an unanticipated rate hike. Mint eventually agreed to reduce by half the termination fee it had sought from the customer, essentially allowing her to opt out of the contract early, according to PURA spokesman Michael Coyle.

Unlike the residential market, where the state has dealt with some “bad actors,” the commercial market has remained relatively unscathed, said state Rep. Lonnie Reed (D-Branford), co-chair of the legislature's Energy & Technology Committee, who called the CBIA complaint “very unusual.”

“CBIA by [its] nature [is] very pro-business, so it's very unusual to see them go after a business entity that they feel has done them wrong,” Reed said.

The variable rate contract ban for residential customers took effect in 2015 after consumers complained about spikes in electricity costs that didn't jive with what they interpreted as their contractual obligations. Some of the suppliers involved proved to be “fly-by-night” firms that entered the market to take advantage of consumers, Reed said.

“They're the ones we just want to get out of the state,” Reed said. “The minute it got competitive those companies could not make a deal and passed a price tag onto consumers. But we had not seen it in the commercial markets because the commercial customers have their own energy people on deck and tend to be more savvy [than the average residential customer].”