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Draft Report: Over 83% Of Residential Customers With A Competitive Retail Supplier Were Charged A Rate In Excess Of A Utility's Default Service During Second Half Of 2020 (70% At Another EDC)

66% Of Retail Supplier Customers On Utility Bill Payment Arrangements Are Paying Greater Than Default Service

Over 14,000 Customers Remain On Supplier Variable Rates After Ban For New Customers

March 29, 2021

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Copyright 2010-21
Reporting by Paul Ring •

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of

The Connecticut PURA has released a draft annual report to the legislature on the state of electric competition

In the draft, PURA said that data filed by the utilities indicates that during the first half of 2020, over 50% of residential customers enrolled with a retail electric supplier paid greater than the Standard Service rate for their generation supply. For the first half of 2020, the median supplier rate in the Eversource (CL&P) territory was $.101155 per kWh (compared to Standard Service rate of $0.09414 per kWh) and the median supplier rate in the United Illuminating (UI) territory was $0.107161 per kWh (compared to Standard Service rate of $0.105607 per kWh).

"The percentage of supplier customers paying more than Standard Service increased significantly in the second half of 2020, with almost 70% of UI customers enrolled with suppliers paying more than Standard Service and over 83% of Eversource’s customers enrolled with a supplier paying more than Standard Service," the draft states

During the second half of 2020, the median supplier rate in the Eversource territory was $.096096 per kWh, compared to a Standard Service rate of $0.07375 per kWh; in the UI territory, the median supplier rate was $0.1001869 per kWh, compared to a Standard Service rate of $0.086672 per kWh.

"The Authority is unable to determine a net cost of this overpayment because the data provided in Docket No. 06-10-22 does not include individual customer usage; however, assuming an average customer uses 750 kWh per month, for the first half of 2020 an average customer in Eversource territory would have paid $31.57 more to a supplier than to standard service during the six-month period (approximately $5.26 more per month), and in the UI territory an average customer would have paid approximately $6.99 more to a supplier than to standard service during the six-month period (approximately $1.17 more per month). For the second half of 2020, the overpayment increased significantly, with the average Eversource customer paying $100.56 more to a supplier during the six-month period (approximately $16.76 more per month) and an average UI customer paying $68.39 more to a supplier during the six-month period (approximately $11.40 more per month)," the draft states

The findings are summarized in the table below.

"The Authority presents this information as a snapshot of supplier rates charged in 2020, but recognizes that supplier contracts may last for longer than six-month Standard Service rates and therefore may reflect risk premiums not reflected in Standard Service rates. Supplier rates may include other terms (such as gift card incentives, cancellation fees, or monthly fees) that are not calculated in the rates. In addition, some customers may be served under contracts with renewable energy content that exceeds Connecticut’s minimum renewable portfolio standard (RPS). The generation supply rate for such offers may exceed the Standard Service rate," the draft states

The draft further notes that, in Docket No. 20-03-15, the docket implementing COVID-19 ratepayer protection measures, PURA Staff collects monthly data from the EDCs regarding the number of customers on payment arrangements that receive service from a supplier and pay more than the standard service rate.

"According to the most recent data from the docket, sixty-six percent (66%) of supplier customers on payment arrangements are paying greater than standard service. These customers are already particularly harmed by the financial effects of the pandemic, and their harm is exacerbated by the rates the suppliers continue to charge them," the draft states

The draft report states that, as of January 2021, 14,644 residential customers of electric suppliers remained on variable rates despite Conn. Gen. Stat. § 16-245o(h)(1) discontinuing new variable rates for residential customers on October 1, 2015. These customers continue in these contracts because they enrolled prior to October 2015 and were grandfathered in when Conn. Gen. Stat. § 16-245o(h)(1) was passed.

"Although the 14,644 customers on variable rates as of January 2021 represent a 41.2% decrease from the number of residential customers on variable rates as of January 2020, the Authority remains concerned that variable rates continue. 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," the draft states

The draft report finds that customer complaints concerning retail suppliers were flat in 2020 (at 204), versus 2019 (at 2019).

"Calendar year 2020 saw supplier complaints holding steady, although ... the Authority (and many Connecticut municipalities) has strongly discouraged door-to-door marketing since March due to the pandemic," the draft states

Complaints about retail electric suppliers had been 417 in 2018

The draft reports that, in 2020, more than 200,000 customers used the Supplier Choice information on (Rate Board) resulting in more than 300,000 visits.

"Although 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, there was an anomalous increase in the summer of 2020 due to the increase in customer bills," the draft notes

This period coincides with increases in regulated distribution charges, and the draft posits that the increase in visits to the state's retail supplier rate board, "was possibly due to customer confusion regarding the difference in supply rate, which is what a customer would contract for when entering into an offer on the Rate Board, versus the distribution rate, which is what initially increased in customer bills in July 2020 and would not have been impacted by a change in supplier."

The draft includes specific customer count and volume (MWh) data for each supplier as of December 31, 2020, though updated data (including specific customer counts by supplier) is available each month in the monthly migration reports filed by the EDCs

As of December 2020, Eversource and UI served a total of 1,606,539 customer accounts in Connecticut. Of the total accounts at this point in time, 1,444,257 were residential, 161,348 were commercial, and 934 accounts were last resort service (LRS). Twenty-one percent, or 344,320 of the total number of customer accounts chose to receive service from a supplier. These accounts receiving service from a supplier were comprised of 271,926 residential accounts, 71,575 commercial accounts and 819 LRS accounts.

The draft report was filed in Docket 20-02-22

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