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Updated: Conn. Legislation To Ban Retail Choice Envisions Utility-Offered "Alternative Standard Service" Options

Rebutting OCC, RESA Says Analysis Shows Retail Suppliers Could Have Saved Connecticut Consumers More Than $14 Million In January 2019

February 5, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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Draft legislation to be filed by the Connecticut Consumer Counsel Elin Swanson Katz to end residential electric choice envisions requiring the utilities to offer alternative default service options

The bill would, as first reported by yesterday (see story here), end residential electric choice is backed by the OCC, U.S. Senator Richard Blumenthal, AARP and other consumer advocates

The draft bill provides that, "On or after October 1, 2019, no electric supplier shall execute a new contract to serve a residential customer with electric generation services; provided, however, that any electric supplier that received certification from the Public Utilities Regulatory Authority as a Connecticut electric efficiency partner under section 16-243v on or prior to December 31, 2018, may continue to execute contracts with residential customers to provide electric generation services involving enhanced demand-side management technologies during the period where such supplier qualifies as a Connecticut electric efficiency partner and following that period."

The bill also calls for additional alternative default service options, to be offered by the utilities, not, "electric suppliers," as would be required under current statutory language concerning alternative default service options

The bill would require, "one or more alternative standard service options."

Under the bill, "Such alternative options shall include, but not be limited to, an option that consists of the provision of electric generation services that exceed the renewable portfolio standards established in section 16-245a, and may include an option that utilizes strategies or technologies that reduce the overall consumption of electricity of the customer or an option that includes rates that fluctuate during three or more daily time periods with the goal of reducing the customer's usage during times of high electricity demand."

Responding to claims made by the OCC, the Retail Energy Supply Association released a study stating that Connecticut residential energy customers could have saved more than $14 million dollars in the first month of 2019, "and received greater value for their energy dollars such as renewable energy, fixed price plans, and loyalty rewards by shopping for electricity from competitive retail electric suppliers."

RESA said that the analysis, conducted by Intelometry, Inc., shows that retail electric supply companies offered dozens of rates below the Connecticut default service price in just the first month of 2019:

January 2019

• Retail supplier Offers below Connecticut price to compare: 70

• January potential market savings = $14,666,655

"The State of Connecticut gave customers the power to choose their electric supplier 20 years ago. For the OCC to attempt to arbitrarily unplug customer choice would short-circuit Connecticut energy customers of potential savings, cleaner energy, energy management tools and other benefits of the competitive market," said Matt White, Retail Energy Supply Association President. "Our analysis concludes that residential customers choosing competitive electricity suppliers could have saved millions in just the first month of this year, discrediting assertions that retail choice does not benefit Connecticut consumers – as the OCC claims."

"The Intelometry Market Saving Report for Connecticut shows that informed consumers can save money on their electricity bills simply by actively shopping," said Guy Sharfman, Managing Director for Intelometry, Inc. "The most recent report for January 2019 shows that out of 141 retail supplier offers posted on the state of Connecticut’s Official Rate Board, 70 of them were lower than their corresponding utility default service rate known as Standard Service. These figures are most certainly in line with previous months that also showed large savings opportunities."

RESA said that, "The OCC also fails to take into account many things, including the differences in the types of products offered by retail electric suppliers, as well as the many reasons consumers choose one product over another, according to White."

"Price is only one factor consumers consider when choosing electricity," White said. "From multi-year contracts that offer longer term price stability, to smart thermostats, and loyalty rewards, suppliers are routinely developing value-added products and services that allow customers to choose the products that meet their own individual needs. Important among these value-added products are green energy options."

"The OCC is essentially saying Connecticut is closed for business. Eliminating an entire industry ensures a loss of jobs and tax revenue for the state of Connecticut," added White. "Retail electric suppliers, unlike the monopoly utilities, are best positioned to provide products consumers demand and the modern electric grid needs."

"Rather than take the unprecedented step of eliminating customer choice and shutting down businesses as proposed by the OCC, the electric supplier industry, OCC and the Public Utilities Regulatory Authority should partner toward creating a well-functioning robust competitive market that values affordability, innovation, de-carbonization and a twenty-first century grid," RESA said

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