Many competitive electricity offers available below the cost of utility standard service rate
An analysis of Connecticut’s competitive electricity market shows many competitive offers below the cost of utility service, and if all Connecticut electricity consumers taking utility standard rate service switched to these lowest available competitive offers, the potential savings are more than $18.5 million for July.
“Some have questioned the value of Connecticut’s competitive energy market, suggesting that utility service offers a better option than signing up with a competitive supplier. But this simplistic equation ignores the values beyond price that competitive suppliers bring to the marketplace,” said Retail Energy Supply Association spokesman Bryan Lee.
“Nevertheless, this analysis shows that if a shopper’s only value proposition were price, many competitive suppliers offer electricity at prices below the standard service rate. If all the state’s electricity customers receiving utility service instead chose the lowest available competitive offer, considerable potential savings would be realized,” Lee said.
As of July 21 in Eversource’s territory, 97 competitive supply offers were available from 23 competitive suppliers. Of those, 21 would provide a fixed rate below the utility rate and 24 offered 100 percent renewable energy “green” offers, some of which were below the utility’s rate. The total potential savings available to standard offer customers amounted to nearly $15.7 million.
As of July 21 in United Illuminating’s territory, 94 competitive offers were available from 24 competitive suppliers. Of those, 13 were below the standard offer rate and 24 offered 100 percent renewable energy “green” offers, some of which were at rates below the utility’s standard offer rate. Total potential savings available to the utility’s standard offer customers amounted to more than $2.8 million.
“Price is only one factor consumers weigh when choosing electricity supply,” said Marc Hanks, RESA’s New England chairman. Suppliers are innovating and developing value-added products and services that go beyond price to differentiate themselves from competitors, he noted. While some provide incentives like gift cards and loyalty points, others offer smart thermostats, smart devices and energy services that allow consumers to take charge of their energy usage. Chief among these value-added products are “green” energy options that allow consumers to express their environmental preferences through their electricity purchase.
“Connecticut’s consumers are benefiting from a range of developing value-added products and services available through competitive supplier product differentiation. Price is only one consideration,” Hanks said. “Encouraging the public to only consider utility standard offer service is a disservice to consumers and the emerging innovation available through the state’s competitive energy market.”
The analysis of potential savings is based on information available through www.energizect.com, the Connecticut Public Utilities Authority’s official rate board website. “The Authority has developed an excellent and comprehensive tool to inform, compare and filter the many choices designed to help consumers find the option best suited to meet their energy needs” Hanks said.