Regulator Demands Retail Suppliers Explain How They Will Comply With New Rate Cap Law

November 30, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA issued an interrogatory to all retail electric suppliers directing suppliers to explain how they will comply with Public Act 23-102, which, effective January 1, 2024, allows hardship customers to choose an electric supplier, provided that the rate does not exceed the standard service (SOS) rate

Specifically, PURA directed suppliers to, "Explain how the licensed electric supplier will comply with Conn. Gen. Stat. § 16-245o(m), as amended by Public Act 23-102, and not be in violation of the statute and subject to civil penalties, until such time that a global solution may be implemented as contemplated in the proposals offered to date or in the event that a global solution is not practicable or cost-effective to implement."

Amended Conn. Gen. Stat. § 16-245o(m) now provides, "On and after January 1, 2024, customers of electric distribution companies who (1) are hardship case [or who are customers who are otherwise defined as being covered by the section] ... may enroll with an electric supplier, provided all customer contracts with electric suppliers, for rates effective on and after January 1, 2024, shall be at or below the standard service rate for the duration of the contracts."

As previously reported, certain proposed global solutions may potentially include automatic rejection by the EDC of hardship enrollments at rates exceeding SOS, and the automatic drop of shopping customers to standard service if a customer becomes a hardship customer mid-contract and their contract includes a rate exceeding SOS

PURA directed the EDCs to file the costs associated with implementing such potential solutions.

However, PURA's Office of Education, Outreach, and Enforcement (EOE) has argued that the proposed solutions relying on the EDC actions described above do not comply with § 16-245o(m) since, although service to the customer would cease, the supplier, as argued by EOE, would still have a "contract" with a customer at a rate exceeding standard service, in violation of statute.

As more fully described in our prior story, EOE seeks to require suppliers to comply with § 16-245o(m) by requiring suppliers to lower their rate (if in excess of SOS) at any point during the contract if the customer is designated as a hardship customer, with the supplier obligated to serve the customer at the contracted rate at all other times, for the duration of the contract

Also notable, as suppliers respond to the interrogatory, is that EOE argues that suppliers cannot comply with § 16-245o(m) by refusing or ceasing service to hardship customers, because Conn. Gen. Stat. § 16-245r provides that, "No electric supplier shall decline to provide electric generation services to a customer for the sole reason that the customer is located in an economically distressed geographic area or the customer qualifies for hardship status under section 16-262c."

EnergyChoiceMatters.com highlighted the phrase "for the sole reason" in previously analyzing EOE's argument (story here)

PURA also directed the EDCs to report on the cost to implement EOE's proposed solution, which would include the EDC automatically resetting a hardship customer's rate to the SOS rate if the supplier rate exceeds SOS, with the supplier required to serve the customer at the SOS rate

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