Consumer advocates say that new laws passed this year will help electric consumers dealing with higher-than-expected rates from so-called "third-party" electric providers. Many of these companies offer lower initial rates than the major utilities -- Connecticut Light and Power and United Illuminating -- but the rates can later spike, often without warning.
State Consumer Counsel Elin Katz said that the new protections were meant to eliminate deceptive practices, such as telling consumers what their actual costs are, long after the electricity has been used.
Speaking on WNPR's Where We Live, Katz said it should now be easier to change suppliers if costs are too high. "The system we have now is, you find out what your rate is, and it can take up to three months, [or] three billing cycles, to change suppliers," she said.
Katz said the changes to the law went into effect July 1, but it will take time to roll out a new electric bill for customers. "You will see on your electric bill what the standard offer rate is," she said. "There will be a comparison on the first page of the electric bill to your rate."
John Erlinghauser, Advocacy Director of AARP Connecticut, supports the new law, but said it can go further to protect all citizens, including the elderly residents he represents. He'd like to get rid of all cancelation fees to put a cap on variable rates and make third-party providers disclose how they arrive at their rate increases. Right now, he said suppliers can cite "market conditions" as a reason for higher electric rates.
"Why is it they get to say market conditions -- just a plain-old term with no definition? They don't have to explain to me what that is as the reason for the cost of energy going up," Erlinghauser said. "But when market conditions and the cost of energy goes down, they [can] just simply hug the regulated standard rate?"
Third-party electric suppliers came into the marketplace in the wake of electric deregulation in 1999, with the hope of providing competition for the major utility monopolies. The new regulations, called a consumer "bill of rights," were passed earlier this year following complaints from customers and an investigation by the state utility regulatory authority.