Third-party electric suppliers may have a new set of rules to live with if a new proposal by Gov. Dannel Malloy makes it through the legislature. The eight-point plan amounts to a consumer bill of rights when dealing with competitive suppliers.
For months, consumer complaints have poured into the Public Utilities Regulatory Authority, the Office of Consumer Counsel and the Attorney General’s Office. Customers have reported spikes in prices with rates as much as quadrupling, questionable marketing practices, and other challenges when dealing with these companies.
"The majority of complaints have been about people getting overcharged, getting switched without permission, and not being able to get out from under a giant rate," said Elin Katz, Executive Director of the Consumer Counsel. "We're changing that whole framework. We're the first state in the country that I'm aware of that's really doing this."
Under the new protections, suppliers would be required to publish on a customer’s bill both the rate they are being charged and the rate that they would pay under the standard offer from either Connecticut Light & Power or United Illuminating.
The protections also make it easier for consumers to switch suppliers. A change back to the standard offer would take just 48 hours, and switching to another supplier would take no more than 30 days.
Currently, customers say it often takes months for a switch to take effect. The proposal would also eliminate or greatly reduce early termination fees.
"Our goal is to arm consumers with better information that allows them to compare electric supplier offers and to make the best choices for their families," said Malloy.
The proposal would additionally give more power to the Public Utilities Regulatory Authority and set aside funding for them to enforce the rules. PURA is in the middle of an investigation that revealed a host of problems between consumers and third-party suppliers.
The agency has received nearly 1,300 complaints in the first three months of 2014. Its final report is expected sometime in June.
The governor is calling on the legislature to move forward with his proposal soon.
The full list of proposed protections is as follows:
1. Disclosure of comparative rates on customers' bills
- Proposal: Require electric bills to show the rate charged by the supplier, rate of standard service, term of standard service, dollar amount billed by supplier and the dollar amount that would have been billed under standard service.
- Purpose: Provide customers with information to make informed choice.
2. Disclosure of high and low rates charged/offered
- Proposal: Require suppliers to disclose to PURA and list on their Web sites (and PURA's) the highest and lowest rate charged to customers.
- Purpose: Allow customers and PURA ability to compare rates being charged by same supplier to different customers in the same period.
3. Initial three months fixed
- Proposal: If a supplier markets a variable rate plan with an introductory "teaser" rate, that rate must be fixed for at least three months.
- Purpose: Eliminate short-lived teaser rates.
4. Quick switching
- Proposal: Require utilities to switch customers, at customer request, back to standard service within in 48 hours and to another supplier within 30 days; after a year, require utilities to switch customers to other suppliers within 48 hours, too.
5. Combat "customer capture "
- Proposal: Reduce or eliminate early termination fees.
- Purpose: Allow customers greater freedom of choice.
6. Affirmative consent for variable-rate contracts
- Proposal: Require affirmative written consent from customer before switching a customer from a fixed to a variable-rate contract.
- Purpose: Prevent companies from taking advantage of customers who aren't paying attention.
7. Regulating unfair and deceptive sales practices
- Proposal: Require PURA to issue new regulations within a year to target abusive sales practices.
- Purpose: Rein in abusive sales practices.
- Proposal: Make funds available to PURA to increase enforcement staff.
- Purpose: Increase market oversight and allow PURA to respond more effectively to abuses in market.