Connecticut Legislators Question Need for Retail Auction, Stress Need for Proposal to Originate at Energy Committee, Not Budget Process

Several Connecticut legislators, addressing the National Energy Marketers Association Connecticut Policy Leadership Roundtable, expressed skepticism about a retail auction of electric default service customers, and said that addressing the auction through the budget process, rather than the Energy & Technology committee, is inappropriate.

Last year, the retail auction was included in the budget process as a source of revenue to fill a budget gap, but that led to criticisms that the auction was a "gimmick" and was not being presented as sound policy for customers. The auction failed to pass

While late revisions to the auction design, such as a set 5% discount versus default service and other consumer protections to allow customers to freely switch away, helped placate some concerns, State Representative Lonnie Reed, Co-Chair of the Energy & Technology Committee, said that legislators see the retail market as the "wild west," and legislators hear that customers are "terrified," due to marketing problems experienced by constituents.

Bypassing the Energy committee through the budget process did not help these matters.

State Representative Jonathan Steinberg, Vice Chair of the Energy & Technology Committee, said that any new auction proposal must start at the Energy & Technology committee, and said that consumer protections must be in the bill from day one.

Steinberg, who characterized the auction as a gimmick, said that retail suppliers must prove that a retail auction is working as intended in other states -- Steinberg doesn't want Connecticut to be the "beta" test for an unproven policy.

State Representative Laura Hoydick, Ranking Member on the Energy & Technology Committee, questioned whether the retail auction was needed, given that about 50% of residential customers have left standard service. Is the auction providing any other benefit than revenue to the state, Hoydick asked?

Hoydick told retail suppliers that the manner in which some suppliers market is giving them a bad reputation, and that she, personally, has received deceptive marketing pitches from two separate suppliers.

Furthermore, if retail suppliers want to expand Connecticut gas choice to the residential market, suppliers need to clean up their image, Hoydick said.

PURA Vice Chair John Betkoski said that default service must continue as a safety net, noting that competitive prices are currently pretty high -- about half of offers from retail suppliers exceed the standard service offer, Betkoski said.