Many Connecticut residential customers have experienced issues with retail electric choice in the last several years: overly-aggressive marketing practices, charging high prices under variable rate contracts, and the current proliferation of fixed rate offers with enrollment and termination fees. Typical questions from residents include:
Should I shop for a third party electric supplier?
What are the new consumer protections?
How should I shop?
Shopping for Electric Service: Know Your Utility Standard Service Rate
Shopping for electric service is only shopping for the generation supply portion of your bill, which tends to be about 50 percent of the overall charges. All the other portions of your electric bill, including distribution services and other charges that are mandatory, will remain the same no matter who supplies your generation.
Eversource or United Illuminating (UI) provides generation supply to residents who do not choose a third party, and it is called Standard Service on your bill. There is a cents per kilowatt-hour (kWh) included on your bill.
Standard Service is a fixed price that only changes twice per year—January 1 and July 1.
You can return to Standard Service with 72-hours’ notice by calling your electric utility, but note that your contract with a supplier may call for a termination fee if you do so.
You can compare offers from third party suppliers at the Connecticut Rate Board, a site that provides the current Standard Service for Eversource and UI and then compares the results for current third party supplier service. You can input your actual average usage (from your bill, expressed in kilowatt-hours) and see how the supplier offers compare to Standard Service. [See, http://www.energizect.com/compare-energy-suppliers ] Note that third party supplier service can and often do 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 are not ripped off or suffer from “fine print” contract terms that have been proven to harm consumers. 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. Check to see if you are on a variable rate contract entered into prior to that date. If so, you can switch to Standard Service or another supplier without penalty or additional fee.
- Third Party Supplier Prices on the Bill. Your utility bill now includes the current standard service rate, the supplier’s rate if you chose one, and whether or not you are saving money or paying more by choosing a third party supplier. Your bill will also include the supplier’s rate for the next billing cycle on your current month’s bill. This should allow you to switch to Standard Service in time to avoid a price spike. You can also switch to another alternative supplier, but that process can take two billing cycles or more and so you may not actually avoid the spike. Please read your bill carefully and, if you receive an electronic bill, be sure to click on the tab to look at the actual bill for next month’s generation rate. Monitor your supplier prices, especially when your contract is about to expire!
- Maximum $50 Early Termination Fees for Fixed Price Contracts. You cannot be required to pay an early termination fee greater than $50 when you leave a third party supplier’s fixed rate contract prior to the end of the term.
- Switch Block List. Do you want to prevent switching from Standard Service altogether, to avoid slamming, miscommunication, or accidents? You can notify your electric utility (Eversource or UI) to get on a “switch block” list that will prevent any switch to a third party supplier. You can change this option at any time without fee.
What else do I need to know? There are still some issues that need your 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? Watch out for contract language that allows the suppliers to enroll you in a “renewal” contract without your affirmative consent. You will get a renewal notice from the supplier and you should read this notice carefully and pay attention to what happens if you don’t respond. You must affirmatively select an offer from your current supplier, ask to return to Standard Service or enroll with another supplier to avoid “negative option” renewal terms.
To file a complaint or raise a concern with the Public Utilities Regulatory Authority (PURA), call 800-382-4586 within Connecticut, or visit the PURA Website at www.ct.gov/pura and click on the tab for “Consumer Affairs.”