Rhode Island House, Senate Pass Bill Banning Auto-Renewal Of Residential Retail Electric Contracts

The Rhode Island Senate and House have both passed S 399, which bans auto-renewal of residential retail electric contracts.

The bill awaits action by the governor

The bill provides that, on and after August 1, 2019, no nonregulated power producer (retail supplier) shall automatically renew or cause to be automatically renewed a contract with a residential customer; provided however that, a new contract with a residential customer shall be required if the terms for electric generation services change from variable to fixed rates, fixed to variable rates, or to a different fixed rate

The bill also revises statute such that the current written renewal notice required to be sent to residential customers shall now be sent to customers on all product types, and shall list the specific expiration date (currently, the notice is only required for fixed price contracts)

This bill also provides that retail suppliers must provide residential customers with the ability to cancel electricity service electronically, as well as an alternative method for customers without Internet access

The contract with a customer shall include the methods by which a customer may cancel service, which shall include electronic termination of an existing consumer’s service agreement prior to the consumer’s next bill read date so long as the request to disenroll has been made at least seven (7) calendar days in advance of the next bill read date. The electronic termination shall be provided in a clear and conspicuous location on the retail supplier's website, and a method by which a customer without internet access may cancel service

Tracy McCormick, Retail Energy Supply Association (RESA) Executive Director, said of the bill's passage that, "RESA is disappointed in the passage of Senate Bill 399. Adoption of these changes would effectively end residential retail choice in Rhode Island. A ban on auto-renewals means that customers will have to waste time reaffirming a choice they’ve already made clear -- otherwise the government will cancel their contracts without their consent. In the end, there won’t be any choice at all because competitive suppliers won’t be able to continue serving customers under such paternalistic conditions. They will be forced to leave the market completely. These businesses pay taxes, contribute to renewable portfolio standards and create jobs -- all of which will be lost."

"Further, the end of residential choice means thousands of shopping customers would be denied the fundamental right to choose an electricity plan that aligns with their individual needs and values, forcing thousands of Rhode Island residents backwards into twentieth century-style utility monopoly service and denying them better value and increased innovation -- benefits only retail suppliers can provide," McCormick said

"States are ceding control of the energy supply business to monopolies who have no incentive to do better. Eliminating competition will only perpetuate this and consumers ultimately lose. We should be looking at ways to improve the competitive energy market, not eliminating it," McCormick said