Kevin Hunt: How Do Electricity Suppliers Get Away With It?


If you can name the company that supplies your home's electricity, the monthly rate, whether it's fixed or variable, the contract length and possible cancellation fees, maybe you're not among the hundreds of people who have complained this year about rate spikes or lined up to speak at one of five public hearings about the state's alternate electricity suppliers.

To everyone else: Have you checked your electric bill lately?

The state's attorney general and consumer counsel offices say you should, warning consumers about "rate shock" in an unusual joint statement in January that identified 10 suppliers charging thousands of customers 17 cents or more per kilowatt hour — some more than double the standard rate offered by Connecticut Light & Power and United Illuminating.

A report released this week by the consumer counsel's office quantified the rate shock — 87 percent of CL&P customers and 70 percent of UI customers using alternate suppliers pay more than the standard rate. Here's the monetary shock: CL&P customers pay $10.75 million more and UI customers $2.96 million more per month.

The Public Utilities Regulatory Authority, which oversees the electricity suppliers, last year received 985 consumer complaints about electricity suppliers. After noting a sharp increase in complaints this year — now close to 1,200 — PURA hosted five public hearings around the state in February.

Customers have complained that alternate suppliers have used teaser rates, repeated robocalls, misleading representations by sales representatives and even door-to-door marketing to encourage them to switch from CL&P or United Illuminating only to see their rates spike after a few months.

John Christensen of South Windsor found out last year after switching to Discount Power what can happen when attractive introductory rates expire.

"My December bill ballooned up to $365," says Christensen, "the bulk of which was due to Discount doubling their generation rate from 9.9 cents per kilowatt hour to 19.9 cents. Such a sudden huge jump is egregious and unreasonable. If the variable nature of their pricing was mentioned when I signed up, I don't remember it. It certainly wasn't emphasized."

Christensen says he immediately switched to a fixed-rate provider.

Since mid-2000, Connecticut residents have had a choice of electricity suppliers, with CL&P and United Illuminating operating the transmission system that brings power to the state's towns, streets and homes. The competition, minimal in the early years, is now a haze of low introductory rates viewable on a state-run website that looks like a page from the credit-card industry's playbook.

Because Connecticut's deregulation is not full deregulation, consumers can buy electricity from about two dozen for-profit suppliers or accept the standard-offer rate from CL&P or United Illuminating, who supply electricity at the same rate they pay for it.

A state-run website designed to inform and help consumers choose a supplier, Energize Connecticut (Ctenergyinfo.com), highlights the introductory offers with a calculator that reflects "savings" when comparing a customer's current rate with other suppliers. The Bottom Line used the calculator recently to find the top five money-saving options for a household currently using about 600 kilowatt hours per month from the default supplier, Connecticut Light & Power, at its monthly rate of 9.235 cents per kilowatt hour.

Two of the five suppliers the calculator found that day, Discount Power and Public Power, were among 10 on the watch list released by the attorney general and consumer counsel. (The others were Choice Energy, Palmco Power, Starion Energy, NextEra Energy, HOP Energy, Xoom Energy, Blue Pilot Energy and Perigee Energy.)

The consumer website listed Discount Power's rate as 8.59 cents per kilowatt hour, but a customer-service representative said that was for United Illuminating customers only. The rate for CL&P customers, she said, was 9.14 cents.

"There is — currently — no prohibition on such discounting," says Michael Coyle, a PURA spokesman.

Discount Power offers no fixed-rate contracts except for introductory deals for new customers. All others have a variable-rate – that day, the rate was 16.99 cents per kilowatt hour, or twice the introductory offer. The representative said there was no guarantee the company would notify customers when their introductory offers were about to expire. Discount Power did not respond to requests for comment Friday.

Consumers who notice the increases can return to the marketplace.

Bill Sebestyen of Windsor says he left Public Power last fall after getting a call from Perigee Energy with a one-month offer at 7.39 cents per kilowatt hour. Sebestyen, then paying 9.99 cents, accepted.

A month later, the 7.39-cent rate became 20.4 cents per kilowatt hour.

"This is an increase of 176 percent," says Sebestyen. "I can understand rates going up, but to almost triple in one month is hard to justify."

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