Deregulated Power
4:32 pm
Fri March 14, 2014

State Authorities Besieged With Complaints About Power Suppliers

Credit Jupiterimages/liquidlibrary / Thinkstock

If you buy power from an independent supplier, rather than the state's two regulated utilities, the Connecticut Light and Power Company and United Illuminating, you could be paying a lot more for your power, rather than saving money.

Putting that extra cost together means a lot of money -- $13.7 million for customers in one month if they had chosen to use a supplier instead.

The Office of Consumer Counsel released a report this week showing just how bad the problem is. It asked for a review from two independent consultants who specialize in public utilities. The consultants studied how much customers in the areas served by CL&P got charged last September, and did the same for UI customers from December to January. The conclusion: the competitive power market in Connecticut isn't working very well.

Credit Alan Yu/WNPR / Data from CT Public Utilities Regulatory Authority

The problem is widespread: the report found that in CL&P territory, 87 percent of the people who get power from suppliers paid more than the standard offer; and in UI territory, 70 percent of people paid more than the standard offer.

State agencies have been besieged with complaints about the power suppliers, says Elin Katz, Connecticut's Consumer Counsel. The Public Utilities Regulatory Authority got more than 800 complaints between January and September last year. The report breaks down the complaints by supplier; 11 companies received no complaints.

 

 

Credit Alan Yu/WNPR / Data from CT Public Utilities Regulatory Authority

 

“If there's one thing that I took away from the public hearings that have been held all around the state, and my individual talks with consumers, and I spoke to many many many of them, is that they're really hurting,” Katz said. “They feel that this is a real bottom line issue for their pocketbook.”

Why are they paying so much?

A lot of people complained that they were told the rate for power would be fixed, but found out it later become variable. That rate change can mean paying as much as an extra $100 a month.

“At this point the sky's the limit as far as how high a variable rate can go, and I'm not sure consumers receive notice of that,” Katz said.

Now the suppliers have said that this was just a hard winter and no one could have predicted just how hard it would be. Earlier this week, David Feldman, vice president of the supplier Abest Power, (which did not receive any complaints) told WNPR's Harriet Jones that regulators are taking too narrow a view of the crisis, blaming independent suppliers, when they should be highlighting the problems of New England's aging power infrastructure and over-reliance on natural gas.

Katz doesn't buy that argument. She said suppliers should have anticipated a spike during the winter and bought more power ahead.

“Now I recognize that takes financial wherewithal to do that, but I think that's reasonable for us to expect that for someone to be in the electric supplier market.”

And that's not all: customers have also complained about suppliers making repeated telemarketing calls that stop only with a complaint to PURA, asking people in door-to-door solicitations to show their electric bill which the supplier will take as an authorization to switch plans, saying a supplier is "with the electric company" and even saying that CL&P will shut off the power if the person doesn't switch to that supplier. Some complaints describe the suppliers' actions as a "bait-and-switch" and "extortion."

Katz said she's also heard about complaints from other states like Pennsylvania, New Jersey and Maryland.

There will be more action in this area to come. Katz said that her office is working with the state attorney general, and that "bad actors" can expect actions against them. Connecticut's suppliers can make their case to PURA at a public hearing in 10 days, and the state regulators are also considering new rules for the industry. She said there will be "significant changes" by early summer at the latest.