Senate Democrats & Consumer Counsel Katz Call for PURA Investigation of Abusive Electric Supplier Marketing Practices
State Senate Democrats and Consumer Counsel Elin Swanson Katz are asking the Public Utilities Regulatory Authority (PURA) to investigate whether Connecticut’s most vulnerable customers are being disproportionately impacted by abusive sales practices and unreasonably high rates for retail electric generation.
The Office of Consumer Counsel (OCC) has identified a concerning number of problems in recent customer complaints related to vulnerable populations being adversely affected by electric supplier marketing practices. The vulnerable populations include low-income consumers, senior citizens, consumers for whom English is a second language, and consumers with disabilities.
“In 2014, in response to growing customer complaints and dishonest billing and marketing practices, we took action to create a Bill of Rights for electric customers,” said Senate President Pro Tempore Martin M. Looney (D-New Haven). “Now, PURA should use that law to investigate reports of potentially abusive practices targeting senior citizens low-income individuals.”
“Customers who are already experiencing financial hardship may be pushed further into poverty by retail rates for electric supply that are unreasonably high,” said Consumer Counsel Katz. “We need to investigate the best ways to protect our most vulnerable populations from such high rates, which may be the result of abusive sales practices. We also can’t forget that when those facing financial difficulties cannot pay their bills, the unpaid amounts are collected from other ratepayers, an amount that was around $50 million in 2016. Whether the general class of ratepayers is subsidizing needlessly high rates charged by some electric suppliers deserves a full investigation.”
“We now have proof that countless seniors and other vulnerable residents of our state have been targeted by deceptive salespeople pushing unreasonably expensive electricity generation contracts,” said Senator Terry Gerratana (D-New Britain). “Unfortunately this does not come as any surprise. I have received calls from these salespeople, as has my elderly mother. We knew to say know, but many have not been so fortunate. Armed with the information collected by the Office of Consumer Counsel, we will be able to take on these shady salespeople and hopefully put a stop to this practice.”
“I was proud to work hard on this piece of legislation to protect consumers, and at the time we passed the Bill of Rights for electric customers it wasn’t certain how many specific cases of abuse were occurring in terms of pricing,” said Sen. Paul Doyle (D-Wethersfield). “Now that more cases have come forward I believe it really provides justification for this piece of legislation. Over time, the evidence has been mounting that this abuse is taking place. I fully support my colleagues and stand with them in asking PURA to investigate whether vulnerable customers are being taken advantage of and overcharged for their residential electricity consumption.”
Publicly available data demonstrates that overall, customers using a supplier have been paying millions more than customers on utility standard service rates. For the rolling year of January 2016 through December 2016, residential customers who chose a retail supplier paid, in aggregate, $59 Million more than the standard service offer. In December 2016, residential utility customers in Connecticut paid, in aggregate, approximately $7.6 Million more than the standard offer for their electric generation. During December 2016, retail suppliers served 29 percent of Eversource Energy (Eversource) residential customers and 35.8 percent of United Illuminating (UI) residential customers.
OCC is keenly interested in reducing the risks and financial burdens of high generation charges for vulnerable populations including those with the least ability to pay. OCC is also motivated to ensure that energy assistance payments are having the maximum possible impact for those customers who receive them.
Consumer Counsel Katz urges consumers who are interested in choosing a retail supplier to shop on www.energizect.com to avoid misleading marketing practices.
More information about the Electric Consumers Bill of Rights:
- Public Act 14-75 empowers customers to make informed choices by requiring more informative bills, allowing faster switching among suppliers and prohibiting coercive or deceptive sales practices.
- More Informative Billing—PURA must redesign the residential electric billing format by July 2015. In the meantime, customers will receive quarterly notices with the information to be added to bills:
- Any change in rate for the next billing cycle, the competing rate of standard service and amount that would have been billed under it, contract terms and expiration dates of current rates, any cancellation fees, a reminder that the customer’s rate is variable as applicable.
- Better Online Information—PURA will redevelop the online rateboard where customers may shop for private supplier offers to be easier to use and display up front all that will now be required on bills.
- New Marketing Standards—PURA must study and adopt new marketing standards for private suppliers and their sales agents, including a ban on suggestions the supplier is an entity of UI or CL&P, or that customers must choose a private supplier. Greater disclosure of rate and contract terms will be required in all advertising materials.
- Transparency in Purchasing—A summary of contract terms must be presented to new customers by private supplier sales representatives at the time of sale, including new rates, rate variability, rate term, contract renewal information, cancellation rights, emissions and resource mixes.
- Enhancing Ability to Choose—Utilities must now transfer customers back to standard offer service within 72 hours of their request. PURA will study expediting transfer to and among private suppliers.
- Termination Fees Cut in Half—The bill lowers the maximum allowable early termination fee from $100 to $50, so customers can more easily escape a disadvantageous private supplier contract.
- Automatic Notice of New Contract Terms—Customers whose contracts auto-renew or transition to variable rates must receive 45 days’ notice, including a description of new terms and a rate history.
- Enforcement—PURA must issue new regulations to target abusive telemarketing, solicitations and renewals, and may investigate deceptive trade practices at will, including targeting of hardship customers. Additional resources for PURA enforcement were provided for in the budget.