New Canaan Rate Payers: State Utility Commission Ruling Affirms Ban on Variable Electric Rates

Customers wooed by promises of lower electric rates in Connecticut are now protected against price gouging and fluctuating rates from third-party utilities.

This week, the Connecticut Public Utilities Regulatory Authority (PURA) issued an Interim Decision that reaffirmed the Connecticut Legislature’s effort to ban variable retail electric generation rates. The decision prohibits electric suppliers from entering into a contract for variable rates – rates that change each month – on or after Oct. 1, and prohibits suppliers from renewing customers into variable rates on or after Oct. 1, according to state Consumer Counsel Elin Swanson Katz.

Katz said, “This is a victory for consumers. We have received thousands of complaints from residential customers of electric suppliers that they were hit by skyrocketing electric prices through variable rates that went up month after month with no warning and no limit. Both the Connecticut legislature and the PURA Commissioners have made it clear that variable rate contracts are not appropriate for residential consumers – which includes hard-working parents, seniors on a fixed income, people who have electric heat, low-income residents, and those with limited English skills, some of the groups most victimized by these escalating variable rates.”

Under the law and PURA’s ruling, a supplier will need to offer a new customer a rate that cannot go up for at least four months, and then can offer renewal terms, possibly at a new price, that also cannot go up for at least four months.

Customers who are already paying variable rates should be aware that neither the law nor PURA’s ruling immediately prohibit or eliminate variable rates in existing contracts. Rather, it only prohibits entering into new contracts for variable rates or rolling customers onto variable rates on or after Oct. 1. Customers who already had variable rate products prior to Oct. 1, will remain on variable rates until their contracts come up for renewal or until they choose to switch to the standard offer or another contract with a supplier.

Katz said it remains critical that all electric customers in Connecticut check their bills and make sure that they know the generation rate that they are being charged, whether that rate is fixed or variable, and whether there is a termination fee associated with switching from that rate. The standard service rate for Eversource electric customers is 8.2 cents/kWh through Dec. 31, 2015, while the United Illuminating standard service rate is 9.1 cents/kWh.

Many customers who have elected to switch to a retail supplier are paying far more than standard service. Switching back to utility standard service is easy and fast if consumers are dissatisfied with their third-party supplier.

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Simply call the electric distribution company and they can typically switch you back to standard service in two business days:

• Eversource residential customer service: 1-800-286-2000
• United Illuminating customer service: 1-800-722-5584

However, consumers are advised to check their contract to determine whether they will incur any early termination fees from their retail supplier if they switch supply services. Katz said that suppliers are not permitted under law to charge a termination fee for customers on a variable rate.

Checking your electric bill to determine your generation service rate is easy and will get even simpler over time, thanks to prior initiatives by the Legislature to promote electric bill clarity. Recent changes to the electric bill allow a customer to see the generation rate they are currently paying along with the name of the supplier and the standard service price, so that the customer can see whether they are saving money.

Starting on Jan. 1, 2016, every supplier will be required to state on the first page of every electric bill whether the generation service rate is “fixed” or “monthly” (meaning rates that can vary each month) and next month’s rate. If you have electronic billing, Katz urges consumers to click on “View Bill” each month so that they will receive all of the new information.

Photo credit: Mike DelGaudio via Flickr.com.