More than 65 percent of all electricity sold in Connecticut comes from competitive retail suppliers, not utilities, according to a competitive supplier report released Wednesday.
The 5th Annual Baseline Assessment of Choice in Canada and the United States says more business and residential customers are seeking out an electric supplier that can offer lower rates than the utility companies.
Connecticut is a deregulated state where utilities such as Berlin-based Connecticut Light & Power and New Haven-based United Illuminating don’t generate the bulk of electricity; they only transport it to ratepayers via transmission and distribution lines. For the generation portion of their bills, ratepayers have the option to stick with the standard service utility rate or switch to a competitive supplier.
Electricity bills still come from the utilities, although the generation rate is set by the customers’ contracts with their suppliers; and the utilities don’t receive revenue from that portion of the bill.
Connecticut was deregulated in 1998, but the competitive retail electricity supply market was slow to catch on, as the savings between suppliers and the standard utility rate was small until recently.
However, over the past four years, the supply market skyrocketed, as the 6.6 percent of residential customers using a competitive supplier in 2008 increased to 40.6 percent in 2011, according to the ABACCUS report.
Business customers caught on much quicker, as suppliers sell 80 percent of all electricity to small businesses and 90 percent to large business, according to ABACCUS.
The increase in competitive supplier customers has coincided with a decrease in the prices of electricity.
As more residents and businesses switch to competitive suppliers, the state government is working to lower the standard service rate offered through the utilities. In June, the General Assembly created the position of procurement management inside the Department of Energy & Environmental Protection to help lower electricity costs for standard service customers.
On Monday, the Connecticut Public Utilities Regulatory Authority approved requests from CL&P and United Illuminating to reduce their standard service generation rates for 2012. CL&P lowered its 12.7 percent while United Illuminating went down 17.8 percent. It marked the third consecutive year for a decrease in the standard service rate.
