Bill Would Condition Retail Suppliers' Participation In Market On "Proof" That Supplier's Products Are Not, "Overpriced Or Harmful"

Bill Would Ban Auto-Renewal Of Retail Energy Contracts; Prohibit Termination Fees

Bill Would Provide That Individual Contractors Of Supplier Vendors Are Legal Agents Of Suppliers

Broad Interpretation Of Language Could Be Read As Giving Regulator Ability To Cap All Retail Electric Supplier Rates (Not Just Low-Income Rates)

March 4, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Connecticut's joint Energy and Technology Committee today heard testimony on HB 6526 which would, among other things, authorize PURA to condition a retail electric supplier's participation in the market on proof that the electric supplier's products are not overpriced or harmful to customers.

Specifically, HB 6526 would provide, "The Public Utilities Regulatory Authority shall have the authority to condition an electric supplier's license and access to the systems and billing of the electric distribution companies on terms the authority determines to be just and reasonable, including, but not limited to, proof that the electric supplier's products are not overpriced or harmful to customers."

The bill would also prohibit the automatic renewal of residential retail electric contracts

The bill provides that, prior to the expiration of a fixed price term for a residential customer [the only new residential contracts allowed], "an electric supplier shall provide a written notice of the contract expiration to such customer and shall not automatically renew said contract."

"An electric supplier may enter into a new contract with such customer's affirmative consent. Any new contract shall contain a cover page highlighting each change from the 56 prior contract, in a format prescribed by the Public Utilities Regulatory Authority," HB 6526 provides

HB 6526 would strike current statutory language which provides that, "Nothing in this subdivision shall restrict an electric supplier 114 from renewing a contract by clearly informing the customer, in writing, not less than thirty days or more than sixty days before the renewal date of the renewal terms, including a summary of any new or altered terms, and of the option not to accept the renewal offer, provided no [termination] fee pursuant to subdivision (7) of this subsection shall be charged to a customer who terminates or cancels such renewal within the first two billing cycles of the renewed contract."

HB 6526 would also completely ban early termination fees for residential customers. Currently, such fees are allowed up to a $50 cap.

HB 6526 would also further confirm the responsibility of retail electric suppliers for the agents of third-party vendors

The bill would provide that, in addition to a supplier's vendor itself (under existing statutory language), a "legal agent" of a supplier shall include, "Any third-party or contracts with or is compensated by a third-party marketer of the electric supplier to sell electric generation services for the electric supplier[.]"

The bill would revise the options available to PURA concerning the treatment of hardship customers

Currently, statute allows PURA to place all hardship customers on default service, with no opportunity to be served by a competitive retail electric supplier -- an undertaking which PURA has exercised, as previously reported

In addition to placing hardship customers on default service, HB 6526 would allow PURA to, "order all customer contracts with electric suppliers, entered into on and after a determined date, to be at or below the standard service rate, or order all customer contracts, entered into on and after a determined date, to comply with appropriate limitations the authority deems necessary."

While the intent appears to be that such limited and regulated supplier options are to be only applicable to hardship customers (as the subsection specifically addresses such customers), EnergyChoiceMatters.com would note that the language would benefit from being more specific, especially when compared to the existing authority to place all hardship customers on default service -- to make clear that the proposed provision does not allow PURA to impose such price limits on "all customer contracts" (e.g. for non-hardship customers).

Specifically, existing statute provides that PURA may, "order all such customers to be placed on standard service." However, the new language about the supplier alternatives lacks the qualifying term, "such."

Rather, as noted above, the language simply states PURA may, "order all customer contracts with electric suppliers, entered into on and after a determined date, to be at or below the standard service rate, or (C) order all customer contracts, entered into on and after a determined date, to comply with appropriate limitations the authority deems necessary."

The bill would further codify the requirement that customer assignments between suppliers are subject to PURA approval, specifically adding that notice to PURA must be provided at least thirty days prior to the effective date of the assignment or transfer of a customer from one electric supplier to another electric supplier.

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