Gov. Dannel P. Malloy on Tuesday proposed stricter regulations on the electricity supply industry, to prevent customers from being charged high rates and stuck in long-term contracts.
The proposal – the Electric Suppliers Consumers’ Bill of Rights – asked the Connecticut General Assembly to pass legislation to:
- reduce or eliminate termination fees
- stop companies from offering low introductory rates for less than three months
- disclose the difference between the supplier’s rate and the default utility rate on consumers’ bills
- disclose to regulators the highest and lowest rates charged by suppliers to consumers
- require consumers’ written consent before they are switched to variable rate contracts
- create new regulations against deceptive sales practices
Tuesday’s proposal comes as more consumers are ditching electricity suppliers in favor of the default utility rate. Malloy made the proposal alongside Attorney General George Jepsen, Consumer Counsel Elin Swanson Katz, and Senate President Pro Tempore Donald Williams (D-Brooklyn).
The Public Utilities Regulatory Authority has opened an investigation into the sales practices of electricity suppliers, including high termination fees, low one-month introductory rates, and flat out lying about the cost compared to utility rates. PURA has received 1,405 consumer complaints in 2014 about the practices of electric suppliers; the companies with the most complaints are Discount Power, North American Power & Gas, and Direct Energy.
Most of the complaints come as region electricity prices are rising, mostly due to constraints in the natural gas supply pipeline. As power prices have spikes, electricity suppliers have passed those costs onto consumers with variable rate contracts.
The electric supply industry rose out of deregulation of the utility industry in 1998, which gave consumers the choice between the default utility rate and an alternative rate offered by a supplier. As of the end of February, 64 suppliers had 672,440 customers in Connecticut.
Electric consumers still receive their power bill from utilities Connecticut Light & Power and United Illuminating, but the generation portion of the bill is at the rate agreed to by the consumer and the supplier.
