April 20, 2016
In the view of the Retail Energy Supply Association (RESA), the Connecticut Office of Consumer Counsel (OCC) is making an unfair apples-to-oranges comparison when it compares a “plain vanilla” utility Standard Service electricity rates with the varied and complex product offerings of competitive retail energy suppliers.
It is not entirely clear the methodology as to how the OCC arrived at its conclusion that residential customers are paying more than Standard Service. RESA thinks that any genuine and accurate comparison of retail suppliers’ offerings versus utility default service needs to account for competitive product offerings that include an array of value-added products and services such smart thermostats, HVAC warranty plans, reward points, solar/PV installation, etc. Additionally, Connecticut electricity consumers have made affirmative choices to obtain products such as “green” or renewable energy from non-polluting sources like wind and solar power. Green energy products are considered a premium product that is generally priced above the utility’s Standard Service rate.
Competitive retail energy suppliers provide product offerings that cannot be obtained from the distribution electric utility company. These value-added products can also provide price certainty over a defined term of service that typically extends well beyond the utility’s six-month Standard Service time horizon. For example, many customers prefer to have a service contract that may extend or 12, 18 and in some cases 24 months in duration. These longer term contractual agreements provide customers with budget certainty that could result in prices that may be higher than the short-term, utility Standard Service rate in effect – however, it is the choice of the customer. This is just one factor differentiating utility service from the range of products and services provided by retail energy suppliers.
Moreover, the state of Connecticut has adopted myriad consumer protection measures designed to help electricity consumers seeking choice in their electricity rates to obtain clear and transparent information that is fully disclosed. RESA has been at the core of many of these important reform measures as means to further enhance the retail electricity market while protecting Connecticut consumers. Some of these important consumer protection measures include a ban of variable rate products where customers now only have the option of a fixed priced product, a key notice provision alerting a customer when their contract is coming to an end, the limitation of the Early Termination Fee to $50, the contract summary that highlights the important provisions of a customer contract, the utility bill redesign that will assist customers to better understand the key elements of their bill , and more.
Therefore, unless the OCC methodology is directly comparing competitive retail supplier’s prices against the utility’s Standard Service rate for the same period of time, RESA believes the OCC’s conclusion is highly misleading and not constructive to Connecticut electricity consumers that are seeking new and innovative product choices that meet their energy needs.
RESA is the nation’s leading association of competitive energy suppliers dedicated to creating and sustaining vibrantly competitive electricity and natural gas markets for the benefit of consumers.
# # #