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Direct Energy Details Improvements That Could Help Connecticut Customers Access Savings From Retail Choice

February 13, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

With the Connecticut OCC recently proposing legislation to end residential electric choice in Connecticut, EnergyChoiceMatters.com (ECM) spoke with Chris Kallaher, Sr. Director, Government & Regulatory Affairs at Direct Energy, to discuss measures that could be undertaken to improve the state's retail market, and make it easier for customers to take advantage of the significant savings available by shopping

As previously reported, a recent RESA analysis showed that there were 70 retail supplier offers below the applicable price to compare in January 2019, with potential market savings in excess of $14 million

Our discussion with Kallaher is below:

ECM: What can be done to support increased consumer education about competitive choice options and encourage shopping?

Kallaher:

"We need to make it easier to buy and easier to sell energy. You don’t have to do anything radical. There are sensible, incremental steps that should be explored and that would increase consumer engagement and would materially improve the competitive market. Simply giving consumers ready access to the information they need to enroll with a competitive supplier, rather than requiring consumers to locate that obscure utility account number on a bill in a drawer, would give consumers the ease of 'enrolling with their wallet' and improve the experience of shopping and switching providers. Providing moving customers the ability to keep their current provider with a seamless move process and requiring customers initiating service for the first time to choose a competitive supplier would foster greater consumer understanding and would give consumers experience in exercising their competition options."

"With the smart metering technology available today, there is no reason why consumers should be forced to wait up to two months to switch providers, when in other states, you can switch in a matter of hours. Accelerating switching enables consumers to hire and fire their supplier at will – and that’s what drives the best from competitive markets."

ECM: Thoughts about supplier consolidated billing?

Kallaher:

"If you sign up with a competitive supplier, but get your bill from the utility, what kind of relationship do you have with your competitive supplier? Do you even remember that you have one or who it is? These are fundamental gaps in the market’s current billing system for consumers, which can be solved by moving to a supplier consolidated billing system, where the customer’s chosen supplier sends the bill and collects payment. Today, competitive suppliers are reduced to a line-item on the utility-branded bill and are also limited in the types of products and services that can be billed on the utility bill. A supplier consolidated bill would help facilitate development and consumer access for more innovative products and services."

"Tens of millions of customers in the United Kingdom, Texas, Alberta, and Georgia are billed this way every month, giving customers more options than they would otherwise enjoy, while also shifting the bad debt risk of consumer nonpayment from utility ratepayers to competitive suppliers."

As noted in our prior story, the OCC bill ostensibly tries to fill the void that would be created by eliminating residential choice by authorizing "alternative" standard service options, such as options that, "reduce the overall consumption of electricity" (such products, such as smart thermostat-linked retail energy plans, are already offered by retail suppliers)

ECM: What do you think about the idea that utilities can fill the innovation gap left by excluding competitive entities from the residential electricity market?

Kallaher:

"Electric utilities are best equipped to fulfill their primary objective of providing safe and reliable delivery service to all customers in their service territory. They are not well-suited to provide innovative products and services in areas that are outside their core function. The imperatives of reliability and resiliency along with the cost-of-service ratemaking model through which we compensate utilities makes them inherently conservative entities, as they should be, rather than the kind of bold, risk-taking firms that drive innovation and market transformation. It would be unfair to utilities to ask them to be something they are not, and it would be misleading to tell consumers that they can expect true innovation in a market that has been returned to the control of a single entity acting as a monopoly retail seller and a monopsony wholesale buyer for every residential customer in the State."

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