Are Connecticut electricity consumers paying too much?
The Office of Consumer Counsel (OCC) is looking to end residential electric choice for Connecticut. Elin Katz, a longtime opponent of competitive electricity suppliers, claims that consumers are facing financial hardships because they’re paying more with third-party providers compared to the utilities’ standard service offers (SSO). But is that really the truth?
In a report released on February 1, 2019, Katz stated that from 2015-2018, consumers who chose to go with third-party electricity suppliers had paid an estimated $200 million more than those who got their electricity through their local utility’s SSO. In addition, Katz stated, “Third-party electric suppliers rely on predatory sales tactics to trick folks into unwittingly signing up for contracts. What’s more, our residents – especially those who are low-income, elderly, use English as a second language, and other vulnerable populations – are getting ripped off by these third-party suppliers, which often charge significantly higher rates than the electric utility default service. Enough is enough.”
How bad is CT’s electricity supplier problem?
The sad reality is that there are unscrupulous salesmen preying vulnerable populations in order to make a fast buck. At present, Connecticut has few regulations for these types of third-party sales. Net-savvy customers who shop online for cheap prices and pay careful attention to the energy market usually find better deals. However, those who speak English as a second language, or don’t know how to navigate the market, may fall victim to sales gimmicks and trickery. Generally, a door to door salesman’s goal is to get you to sign a contract as quickly as possible, without having enough time to properly research or understand what you’re signing. Katz claimed that in 2014, the state’s Public Utilities Regulatory Authority (PURA) received more than 1,300 consumer complaints accusing electric providers of misleading advertisements, aggressive door-to-door sales, and violating “Do Not Call” lists. It is a very real problem.
But salesmen aren’t the only ones being accused. PURA fine one electricity supplier $900,000 in 2018 for “failing to adhere to state laws requiring that consumers receive timely and accurate billing information.” PURA accused the supplier not supplying timely information about upcoming rates, preventing numerous customers from knowing how high their upcoming bills would be.
While the OCC’s reaction has been to call for the end of third-party electricity suppliers in Connecticut entirely, it’s difficult to believe that removing consumer choice would result in a healthier, cheaper market. Wholesale market rules, growing demand outstripping supply, congestion in the state’s electric transmission system, and the region’s reliance on natural gas are the main factors contributing to why Connecticut’s residential electricity rates are among the highest in the country. According to the Office of Legislative Research, “Interstate gas transmission lines, however, have not expanded in proportion to the increase in supply and demand.” Legislation was also introduced in 2014 that removed variable rate plans and introduced new customer protections.
Yes, there are a few bad apples in the bunch, as with any retail market. But most third-party electricity suppliers work to comply with PURA’s rules. And even in spite of the state’s higher energy costs, many of Connecticut’s energy customers can save money by doing their research and choosing third-party suppliers that are cheaper than the SSO.
How can I shop for the cheapest electricity in CT?
So, how can you avoid being duped into paying higher electricity rates than you should be? The most important thing is to do first is to gather your information and research.
Know the SSO rate for your area. Use it to compare with third-party suppliers. For example, the current residential rate for consumers with Eversource is 10.143 cents per kWh. For consumers with United Illuminating, the current residential rate is 11.2263 per kWh. These prices change every six months, lasting January to June, then July to December. Both Eversource and United Illuminating reveal any price changes for the upcoming six months several weeks beforehand. Look for these announcements in mid-May and mid-November. This way you can learn price changes in advance and shop around.
Know your usage. Check your electric bills for the past year to determine roughly how much energy you use per month and how much it costs. This way, you can estimate how much your bills would be with one provider and compare them with another.
On a low-income assistance program? Don’t switch! There’s no need and you’re unlikely to save more money by leaving the program. No matter how much that pushy salesman tries to convince you that you could save by switching to a third-party supplier, there’s no need.
Shop carefully. CT Energy Ratings offers a wide range of energy plans to suit all types of consumers, and information is presented so you can tell at a glance whether the plan is right for you or not, and whether you can save any money compared to your current rates.
Always read the fine print! Always make sure that you read the third-party supplier’s Terms Of Service (TOS) before signing anything. Connecticut currently does not require companies to follow a standardized TOS form. So each company uses their own wording format that may potentially bury fees in their TOS text. Check for fees and other charges that could effect your monthly bill. Specific items you should look for:
How long is the contract?
What is the pricing structure?
How much are the late payment fees?
Are there early cancellation fees?
Will my plan automatically renew at the end of the contract, and if so, at what rate?
Stay informed and know your energy consumer rights. If a pushy salesman comes to your door or calls you on the telephone, don’t let them rush you into signing a contract. Always take your time, consider thoroughly, read everything, and if you need to, do further research on your own. Don’t let them fluster you into signing something on the spot.
Stay informed on electricity matters with CT Energy Ratings!
The OCC has raised many valid objections. But ending residential electric choice is a serious step that affects everyone within Connecticut. Regardless, it’s always a good idea to shop carefully for a third-party electric supplier. Legislators have not begun acting on the proposed bill to ban residential electric choice. That means you can keep up to date with further developments right here on CT Energy Ratings. You can also explore what third-party options are currently available at https://www.ctenergyratings.com/electricity-rates right now.