Most consumers wouldn’t buy a car from a door-to-door salesman. Or a phone. Or even a vacuum.
Yet, when it comes to buying electricity — something homeowners and businesses will spend thousands on annually — door-to-door sales and telemarketing apparently are what works in Connecticut.
The Public Utilities Regulatory Authority has been mired in an investigation into the marketing and sales practices of competitive electricity suppliers, an industry that sprung out of the 1998 deregulation of the electric utilities, letting consumers choose who sells them electricity and at what price.
Consumers have told horror story after horror story about their experiences with suppliers: bills that suddenly skyrocketed; telemarketers lying about their prices compared to the default utility rate; pushy salesmen; and expensive buyout clauses. This has all been made worse by the region’s rising electricity costs, forcing even suppliers with good reputations to raise their prices.
While the industry must stop shady marketing practices to gain long-term credibility, consumers must be more proactive in understanding what they are buying. Do intelligent people really need a state agency to tell them not to lock into a one-year contract that allows a company to charge whatever it wants after three months?
Many industries are pushing consumerism, forcing buyers to be more engaged with the goods and services they purchase.
Health insurance is a good example. Traditionally, people have purchased insurance coverage through their employer, who covered most of the costs. The majority of consumers paid little attention to how their policies actually worked because they weren’t paying the bill. Today, that’s changing as companies require employees to shoulder more of their healthcare cost burden.
Consumers have educated themselves on so many things: cars, auto insurance, cable contracts, and smartphones. They know to stay away from the bad companies and work with the good ones.
Energy is the next thing customers must be smart about: pricing, who to work with, who to avoid, and the cost and benefits of every decision. The industry is on the cusp of a consumer revolution that will offer so many more options than the simple flick of a light switch, similar to how the telecommunications industry has evolved beyond just a landline telephone.
So, the next time a salesman comes knocking on the door, be armed with the right information to make a smart decision. That is the best way to avoid a horror story.
Budget woes more cause for concern
Budgets are always a numbers game. Unfortunately for Gov. Dannel P. Malloy, his numbers aren’t adding up.
The state legislature’s nonpartisan Office of Fiscal Analysis recently projected that Malloy’s 2014-15 budget will be in the red by $69.4 million. That’s in contrast to the $22.3 million surplus projected by the governor’s budget office.
OFA said higher retiree healthcare costs and greater funding requirements for magnet schools will knock Malloy’s budget off-kilter. Malloy’s budget chief, Ben Barnes, rejected OFA’s analysis and said the state will live within its spending plan.
Regardless, the numbers show Connecticut’s finances are still on fragile ground.
With future billion-dollar deficits looming, lawmakers need to build a stronger financial cushion to head off the threat of further tax hikes. To start, legislators should commit more of this year’s $500 million projected surplus to the rainy day fund. Malloy proposed using about a third of those dollars for an election-year tax rebate, which is unnecessary political pandering.
Then lawmakers need to figure out how to trim future budgets so the state can once again live within it means.n
