Most Connecticut residents will receive a significantly lower generation rate than current standard service rates for their electricity beginning July 1. The Connecticut Public Utilities Regulatory Authority (PURA) announced the new standard service generation rates for Eversource and United Illuminating (UI) residential customers in early March. Residential standard service rates for Eversource will decrease from 9.555 cents per kilowatt-hour (kWh) to 6.606 cents/kWh, and for UI from 10.7358 cents/kWh to 8.0224 cents/kWh.
Electric distribution companies, Eversource and United Illuminating (UI), provide default generation supply – labeled Standard Service on the bill – to residents who do not choose a third party. Standard Service is a fixed price that only changes twice per year—January 1 and July 1.
Some electric customers choose to get generation supply from a third party instead of the standard service. As a result, many third party customers pay more for supply due to misleading practices. AARP fought for many consumer protections to help customers from being overcharged by overly-aggressive marketing practices, charging high prices under variable-rate contracts, and a proliferation of fixed rate offers with enrollment and termination fees that have frequently resulted in residential customers paying more than the standard service over the course of their third party contract.
Third party suppliers can – and often do –aggressively reach out to consumers with an offer to lock in a service rate prior to start of a rate decrease in order to get a higher rate contract.
AARP fought for many new protections electric customers should consider before signing a contract for their energy supply with a third party:
Shopping for Electric Service: Know the Utility Standard Service Rate
Shopping for electric service is only shopping for the generation supply portion of the bill, which tends to be about 50 percent of the overall charges. All the other portions of the electric bill, including distribution services and other charges that are mandatory, will remain the same no matter who supplies the generation. There is a cents per kilowatt-hour (kWh) included on the bill.
Consumers can return to Standard Service with 72-hour notice by calling the electric utility, but a contract supplier may have a termination fee to do so. Customers can compare offers from third party suppliers at the Connecticut Rate Board, a website that compares the current Standard Service for Eversource and UI against a third party supplier service. The site can provide users with the cost differences between third party and standard service by inputting the actual average usage (kilowatt-hours on the statement), In addition, the third party supplier service can and often does rise following the expiration of the offer stated on the Rate Board.
New Consumer Protections
In the last several years, AARP has fought for consumer protections to ensure that residential consumers do not suffer from “fine print” contract terms that have been proven to harm them. Here are some of the recently adopted consumer rights that all suppliers must comply with:
- No More Variable Rate Contracts: As of October 1, 2015, suppliers cannot offer and impose variable rate contracts for residential customers. As a result, suppliers must offer fixed-rate contracts to their new customers. Residents can check if they are on a variable rate contract entered into prior to that date and switch to Standard Service or another supplier without penalty or additional fee.
- Third Party Supplier Prices on the Bill: A utility bill now includes the current standard service rate, the supplier’s rate if one was chosen, and if the charges are higher by choosing a third party supplier. The bill will also include the supplier’s rate for the next billing cycle on the current month’s bill. This should allow for a switch to Standard Service in time to avoid a price spike. There is also an option to switch to another alternative supplier, but that process can take two billing cycles or more and may not actually avoid the spike. Consumers should read the bill carefully, look at the bill for the next month’s generation rate online, and monitor supplier prices, especially when a contract is about to expire.
- Maximum $50 Early Termination Fees for Fixed Price Contracts: Consumers cannot be required to pay an early termination fee greater than $50 when they leave a third party supplier’s fixed rate contract prior to the end of the term.
- Switch Block List: Consumers can notify their electric utility (Eversource or UI) to get on a “switch block” list that will prevent any switch to a third party supplier. They can change this option at any time without fee.
What Else Do Consumers Need to Know?
There are still some issues that need careful attention when shopping and comparing offers from third party suppliers or after switching to a new supplier.
- Does the supplier charge additional fees or minimum usage requirements? Some suppliers are now charging an “enrollment fee” to select their service that could negate or minimize any potential savings. There is no fee or charge to leave or return to Standard Service.
- How long should I enroll in a fixed rate contract in light of Standard Service price changes every six months? Any fixed rate contract must be a minimum of four billing cycles, but suppliers can offer fixed price contracts for longer terms.
- What happens at the end of the fixed price term? Consumers should be on the look out for contract language that allows the suppliers to enroll them in a “renewal” contract without an affirmative consent. They should read the renewal notice from the supplier carefully and pay attention to what happens if they do not respond. A consumer must affirmatively select an offer from their current supplier, ask to return to Standard Service or enroll with another supplier to avoid “negative option” renewal.
Consumers can file a complaint or raise a concern with the Public Utilities Regulatory Authority (PURA) by calling 800-382-4586 within Connecticut, or by going to the PURA Website www.ct.gov/pura and clicking on the tab for “Consumer Affairs.”