The Power Switch: More Customers Seek Third-Party Energy Suppliers

Hard data has shown many electric customers are mad, and they’re not going to take it anymore.

We’re talking about “standard electric supply rates” offered by our state’s major utilities that skyrocketed this winter to rates between 22 to 24 cents per kilowatt hour.

It has prompted tens of thousands of customers to give third-party electric suppliers a try, since the deregulation of our state’s electric industry does allow consumers a choice.

Sonia Corbin of Sterling has electric heat, and she got an eye-popping bill from her electricity supplier Eversource this February.

“It was $1,100, which is more than my mortgage payment,” Corbin said.

Standard offer electric supply rates from major Connecticut utilities Eversource and United Illuminating doubled this winter, according to a state watchdog.

Corbin said, “It hurt every which way.”

Electric utilities and regulators have explained the price of natural gas that fuels most power plants jumped due to the war in Ukraine, adding the charge on the supply side of your bill is a straight pass-through, and the utilities don’t profit from it.

So, what’s a customer with standard offer rates supposed to do?

Gary and Barbara Smith of Meriden are running out of options.

“I’m having all sorts of special dental work done, which are mostly out of pocket, and I’ve had to postpone that. And just, you know, we, we don't go out much anymore,” Smith said.

Connecticut deregulated its electric market two decades ago, allowing people to shop around for better supplier rates.

The debut of the program had its bumps, as customers got burnt on adjustable rates and long-term contracts. State leaders said all or most of those issues have been addressed.

Senator Norman Needleman co-chairs the Connecticut legislature’s Energy and Technology Committee.

“We've regulated how they market, we've tried to eliminate the fact that they can go door-to-door and get you in on teaser rates. We've given people the options to get out whenever they want,” Needleman said.

A growing number of home and business owners have now been using third-party electric suppliers in Connecticut, with some rates roughly half of Eversource’s or UI’s, according to EnergizeCT - a website where customers can browse rates online.

While some customers get rates that are much lower, in some cases, the third-party supplier's rates could be higher.

Corbin’s bill dropped more than $400 after she switched electric suppliers.

“There's numerous suppliers that people can choose from. They all have different rates; they all have different terms,” Corbin said.

And they have been attracting new customers.

Data filed with the Public Utilities Regulatory Authority, or PURA, indicated at the end of last year, about 10% of Eversource customers were with third party suppliers. That number stood at almost 19% just three months later - about 118,000 customers making the switch.

About 18% of UI customers have gone with third-party electric suppliers, up from roughly 13%, representing an additional 20,000 customers.

Gary Smith has been with a third-party supplier in the past and plans to be back with one soon.

“I just don't understand why more people wouldn't do that,” he said.

A spokesperson for Eversource said, “With the rise in supply costs, we expected there would be an increase in people seeking a third-party supplier. We encourage people to look at those rates and go to the EnergizeCT page to find those suppliers.  We just remind people to read the fine print and the terms of these agreements. These rates do change periodically.”

UI issued the following statement: “Electric customers in Connecticut have the ability to shop for their electric supplier or opt for Standard Service, which is a pass-through rate that utility companies do not profit from in any way. United Illuminating is focused on ensuring its customers understand their options, as well as the programs we offer to help any customer that is struggling to manage their bill, including matching payment and bill forgiveness programs.”

People who receive state assistance with their electric bills are not eligible to switch to a third-party supplier under current state law. That may change in the future.

Still, there has been a lot of migration to third-party suppliers in the past three months. It’s uncertain if it will continue since standard offers by Eversource and UI will likely drop in July, as the price of natural gas is expected to come down.

Also of note, the percentage of Eversource and UI business customers using third-party suppliers has been significantly higher than that of residential users.