A new report suggests that poorer electric customers would pay far less using standard utility suppliers rather than third-party vendors.
The report by Consumer Counsel Elin Katz, a longtime opponent of competitive electricity suppliers, said electric customers facing financial hardships spent about $7.2 million more to purchase electricity from a third-party vendor compared to standard utility service.
Authored by economic consultant Susan M. Baldwin, the report examined the impact third-party electric suppliers have on vulnerable customers over two years from Oct. 2016 to Sept. 2018.
The study, backed by the legislature, was meant to help the Connecticut Public Utility Regulatory Authority (PURA) determine whether to place hardship customers, including those with certified medical protection and others receiving public assistance, on standard utility service.
According to the report, low-income populations — referred to as “hardship customers” — on average paid $143 more a year than non-hardship electric customers. The only equitable remedy, Katz said, would be to place these vulnerable customers on standard service.
“$143 is a lot of money for many consumers who struggle to make ends meet,” said Katz, who recently pressed the General Assembly to ban third-party suppliers from entering into contracts with residential customers in Connecticut.“They clearly would have been better off on the ‘standard service’ option available from our electric companies, Eversource and United Illuminating.”
Katz argued that suppliers such as Eversource and United Illuminating have standard prices procured through a competitive process overseen by various state agencies.
In Sept. 2018, 35 percent of hardship customers bought electricity from third-party vendors, compared to 27 percent of non-hardship customers. An even larger number of hardship customers in Connecticut’s poorest areas (50 percent) — including Hartford, Waterbury and Bridgeport — purchased electricity from third-party suppliers.
Katz said similar findings were revealed in Massachusetts last year, when their attorney general found that low-income populations made up a larger share of the third-party residential electric supply market.
As reported earlier this month, the Office of Consumer Counsel found that third-party electric customers paid an estimated $200 million more than consumers of standard utility service.
