Report From Regulator's Staff Says 90% Of Shopping Residential Customers At Utility Paid Rate Above Default Service In Second Half Of 2021
Staff Reports "Pronounced" Effect On Communities Of Color, Says 14 Suppliers Charged Over 90% Of Such Customers Rate Higher Than SOS
Staff Cites Free Advertisement, Enrollment Services Provided To Suppliers Paid By Ratepayers
March 14, 2022 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Office of Education, Outreach, and Enforcement (EOE) of the Connecticut Public Utilities Regulatory Authority (PURA) petitioned the Authority to adopt, as PURA's annual report to the legislature on electric competition, a report drafted by EOE
Based on customers billed under utility consolidated billing, EOE said in its report that the data indicates that during the first half of 2021, almost 60% of Eversource residential customers and almost half of UI residential customers enrolled with a supplier paid greater than the Standard Service rate for their generation supply. In aggregate, this represents about 148,000 customers, per EOE's report
"For the first half of 2021, the median supplier rate in the Eversource territory was $0.094780 per kWh (compared to Standard Service rate of $0.08391 per kWh) and the median supplier rate in the UI territory was $0.100340 per kWh (compared to Standard Service rate of $0.093694 per kWh)," EOE said
The percentage of supplier customers paying more than Standard Service increased significantly in the second half of 2021, EOE said, with almost 90% of Eversource customers enrolled with suppliers paying more than Standard Service and more than 73% of UI’s customers enrolled with a supplier paying more than Standard Service. In aggregate, this represents about 200,000 customers, per EOE's report
"During the second half of 2021, the median supplier rate in the Eversource territory was $0.094234 per kWh, compared to a Standard Service rate of $0.07003 per kWh; in the UI territory, the median supplier rate was $0.099247 per kWh, compared to a Standard Service rate of $0.080103 per kWh," EOE said
EOE said that it is unable to determine a net cost of the cited overpayment because the rate data does not include individual customer usage.
"[H]owever, assuming an average customer uses 750 kWh per month, for the first half of 2021 an average customer in Eversource territory would have paid $48.90 more to a supplier than to standard service during the six-month period (approximately $8.15 more per month), and in the UI territory an average customer would have paid approximately $29.88 more to a supplier than to standard service during the six-month period (approximately $4.98 more per month). For the second half of 2021, the overpayment increased significantly, with the average Eversource customer paying $108.90 more to a supplier during the six-month period (approximately $18.15 more per month) and an average UI customer paying $86.16 more to a supplier during the six-month period (approximately $14.36 more per month)," EOE said
"This overpayment is particularly harmful to communities of color. Interrogatory EOE-1 requested that suppliers indicate rates charged each month by zip code. Using census data indicating percentage of racial population by zip code, an examination of the data provided by suppliers in response to EOE-1 shows that communities of color being served by suppliers in 2021 fared even worse than the general population. Three suppliers charged every customer in the affected zip codes rates higher than standard service for all of 2021, and four other suppliers charged more than 91% of affected zip codes rates higher than standard service for all of 2021. This trend applied to both large and small suppliers, with some extremely large suppliers charging every Eversource customer in the affected zip codes more than standard service during the second half of the year. In fact, for the second half of 2021, fourteen suppliers charged more than 90% of customers in the affected zip codes more than the standard service rate. Although the majority of all customers with a supplier paid more in 2021, the effect on communities of color was pronounced," EOE said
"The data filed monthly in Docket No. 20-03-15 shows the harm caused when customers already struggling to pay their bills are subjected to higher than necessary supplier charges. At the close of 2021, of the 3,213 Eversource customers on a payment arrangement being served by a supplier, 2,131, or two-thirds, were paying supplier rates higher than standard service, some as high as 20 cents per kWh. In UI territory, 1276 of 1355, or 94% of customers on a payment arrangement being served by a supplier were paying more than the standard service rate. It is concerning that customers who are attempting to pay off delinquent balances are continuing to pay suppliers more than double the standard service rate, contributing even further to not only the customer’s arrearage but ultimately to the state’s mounting uncollectible balance," EOE said
"Due to the statutory requirement for the EDCs to purchase the receivables of suppliers, suppliers are paid almost 100% of their receivables regardless of whether or not the customer pays their utility bill, leaving all ratepayers subsidizing suppliers’ higher rates when customers cannot afford their bills," EOE said
EOE also reported that, as of December 2021, 9,484 residential customers of retail electric suppliers remained on variable rates.
"Although this represents a 35% drop from the number of residential customers on variable rates in 2020, it is concerning that so many customers remain on
variable rates despite Conn. Gen. Stat. § 16-245o(h)(1) discontinuing new variable rates for residential customers on October 1, 2015," EOE said
"These customers continue in variable rate contracts because they enrolled prior to October 2015 and were grandfathered in when Conn. Gen. Stat. § 16-245o(h)(1) was passed. Variable rate customers have paid and continue to pay rates much higher than standard service and the continuation of these contracts could reflect customers’ lack of understanding of the contracts they entered or their lack of knowledge of the contract. Recent amendments to Conn. Gen. Stat. § 16-245o(g)(4) prohibit suppliers from charging variable rates after July 1, 2022, although there is a concern that suppliers may convert variable rate contracts to fixed rates at higher average prices," EOE said
EOE reported that customer complaints against retail electric suppliers filed with PURA were 149 in 2021, down from 204 in 2020, and compared to 620 in 2017
"Calendar year 2021 saw supplier complaints dropping 27%. This smaller number of complaints may partially be due to EOE’s ongoing revocation of certain supplier licenses and/or voluntary withdrawal of some suppliers from the Connecticut market. Also, the Authority (and many Connecticut municipalities) has prohibited door-to-door marketing since March 2020 due to the pandemic," EOE said
EOE reported that, in 2021, approximately 280,000 customers used the Supplier Choice information on EnergizeCT.com (Rate Board) resulting in roughly 450,000 visits.
EOE said, "The trend over many years has been to see increased traffic to the site in the winter when the standard service rate tends to increase."
"Although the Rate Board continues to be a helpful resource for customers opting to review and compare their electric generation options, it is funded by ratepayers, not suppliers ... only approximately 13.5% of all residential customers receive service through a supplier and only a fraction of those enroll through the Rate Board. As a result, the Rate Board inures to the benefit of a limited number of customers and significantly to the benefit of suppliers, who receive free advertisement and free enrollment services through it," EOE said
EOE's report also included the number of customers served by each supplier as of December 31, 2021, and the supplier's share of migrated customers (this data is publicly reported monthly)