Electric Prices Jump For Customers Of Some Power Suppliers
By STEPHEN SINGER, AP Business Writer
HARTFORD, Conn. (AP) _ Connecticut’s attorney general and consumer advocate warned electricity customers on Thursday about price spikes by some power suppliers that are nearly double what the two regulated utilities are charging.
Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz said thousands of customers are being charged 17 cents per kilowatt hour and some nearly 25 cents per kilowatt hour. Connecticut Light & Power customers pay 9.2 cents and United Illuminating Co. charges its customers 9 cents per kilowatt hour.
Fluctuating, or variable, rates are part of the problem, they said.
“A number of companies offer variable rate products that are marketed with an attractive and competitive teaser rate that is quickly replaced by significantly higher charges without notice,” Jepsen said.
Officials also have received complaints about customers who said they were automatically transferred from fixed-rate arrangements to “exorbitantly high variable rate products.”
The state Public Utilities Regulatory Authority is investigating. Regulators say they will establish rules and guidelines for electric suppliers and electric distribution companies concerning customer switching practices, fixed and variable rates and other details.
Discount Power in Shelton, which was among several companies cited by Jepsen and Katz, tells callers that the price increases are due to extremely high demand for energy during the winter’s fierce cold spells. It said it expects prices to fall after the end of winter.
Joseph Rosenthal, principle attorney at the consumer counsel’s office, says electricity suppliers claiming that prices follow the market usually fail to define the market and what causes price changes.
Officials expect price spikes in electricity in the winter, but they took notice when rates were double what the regulated utilities charge, he said.
“When you’re getting up to the 17-cent range, it starts to raise eyebrows,” Rosenthal said.
Sen. Bob Duff, Senate chairman of the legislature’s Energy and Technology Committee, said legislation this year might require greater disclosure by suppliers to inform customers when temporarily low rates will rise.
“People are promised lower rates, they get lower rates for a short time and unbeknownst to them the rates increase,” he said.
Connecticut deregulated energy markets about 14 years ago, allowing small electricity suppliers to enter the market and compete with the two regulated utilities. Some market their electricity as based largely on renewable sources of power while most have touted their electricity as cheaper than what is provided by utilities.
Katz said customers could pay about $100 more a month than the utilities’ rate.
“What’s the benefit to the consumer of paying more for the very same electricity they can get from their electric company or another supplier for less money?” she said.