Decoding Electricity Plans and Rates

By Natalie Missakian

David Thomas considers himself smart with a dollar, so the offers showing up in his mailbox promising smaller electric bills were hard to ignore. A few years ago, he took a leap and signed on with an alternate supplier that lured him in with significantly lower rates.

“It was good for a few months, and then it ramped up pretty high,” said Thomas, 77, an AARP volunteer from West Hartford, who said it took a few billing cycles before he figured it out. “All I know is, I was wasting a lot of money for a while.”

Connecticut deregulated its electricity market in 2000. Consumers can go with their utility company’s standard rate plan or shop for a better deal through a retail, or third-party, supplier.

But navigating the market can be confusing, with some companies charging enrollment or cancellation fees that can negate the savings. And though the state banned variable-rate contracts for residential customers in 2015, rates can still rise when the initial contract period expires. The ban also doesn’t apply to contracts signed before the law took effect.

After his experience, Thomas signed on to work with AARP Connecticut and the state Public Utilities Regulatory Authority (PURA) on a series of presentations this year aimed at helping consumers navigate the market.

“We want to arm people with the tools and the knowledge to take control,” said Thomas, a retired Veterans Affairs research administrator. “The purpose is to help people like myself sort through it and determine whether or not switching is really worth it.”

While people can save money by changing suppliers, many can end up paying more, state and AARP officials said.

Paying too much?
According to a report by the state Office of Consumer Counsel, which advocates for ratepayers, more than half of Eversource Energy customers using retail suppliers paid a combined $2.7 million more in August 2017 than under the standard rate.

“It’s kind of startling to us that this keeps happening,” said John Erlingheuser, AARP Connecticut advocacy director. “Suppliers and regulators say there are customers who should never be entering the third-party market in the first place.”

High-use consumers can save money, even with an enrollment fee, but older adults are unlikely to fall into that category, Erlingheuser said. “If a person is using less than the average amount of kilowatt-hours, the savings with a third-party supplier are likely not enough to make navigating the system and constantly monitoring their rates worth it.”

Art Marcelynas, lead rate specialist at PURA, said the standard rate may be a better choice for those who want to “set it and forget it,” since it is fixed for six months, with new rates coming out every January and July.

He said customers who aren’t sure if they’re paying too much should check the first page of their monthly bill, which includes their current rate, term, expiration date and a comparison with what they would pay with standard service.

Consumers can also go to energizect.com/compare-energy-suppliers and plug in their monthly usage figures for a customized rate comparison. Those with questions or complaints can call PURA at 800-382-4586.

To request a presentation in your community, contact Erica Michalowski at 860-548-3163 or emichalowski@aarp.org.

Natalie Missakian is a writer living in Cheshire, Conn.