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Conn. Democrats want investigation into 3rd-party retail energy suppliers

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Conn. Democrats want investigation into 3rd-party retail energy suppliers

Connecticut Democrats and the state's consumer counsel want an investigation into price gouging and deceptive marketing by third-party electricity suppliers.

Connecticut state Senate Democrats joined Consumer Counsel Elin Swanson Katz on Jan. 30 in asking the Public Utilities Regulatory Authority to investigate whether Connecticut's most vulnerable customers are being disproportionately ripped off by retail energy suppliers. Those vulnerable populations include low-income consumers, the elderly, non-native English speakers and individuals with disabilities.

Similar proceedings played out in neighboring New York recently resulted in the Cuomo administration banning energy service companies, or ESCOs, from selling to low-income customers.

Katz and Senate President Pro Tempore Martin Looney alleged that Connecticut residential consumers paid $59 million more for electricity from a third-party supplier in 2016 than if they had gone with their utility's standard offer. As of December 2016, ESCOs served 29% of Eversource Energy residential customers and 35.8% of Avangrid Inc. subsidiary United Illuminating Co.'s residential customers.

"Customers who are already experiencing financial hardship may be pushed further into poverty by retail rates for electric supply that are unreasonably high," Katz said in a news release. "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."

Katz said the failure of individuals already under financial hardship to pay their electricity bills shifts the burden onto others, with around $50 million in such payments during 2016 alone being footed by ratepayers at large. "Whether the general class of ratepayers is subsidizing needlessly high rates charged by some electric suppliers deserves a full investigation," she said.

Looney said PURA should use the Electric Consumers Bill of Rights passed in 2014 in response to growing customer complaints to investigate reports of dishonest billing and marketing practices.

The petitioning group of Democrats claim to have evidence of abusive salesmanship by retail energy suppliers.

"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 Sen. Terry Gerratana in the same announcement. "I have received calls from these salespeople, as has my elderly mother. We knew to say no, but many have not been so fortunate."

Bryan Lee, spokesman for the Retail Energy Supply Association, or RESA, which represents retail energy suppliers in New York and Connecticut, said in a statement that PURA already has adequate tools to rein in improper activities. He also stressed that Connecticut's competitive electricity and natural gas markets continue to provide consumers with valuable and broad range of options, including cleaner energy priced below Eversource's and United Illuminating's rates.

Lee noted that RESA members and other retail suppliers hold monthly meetings with PURA staff to review the marketplace and complaints. "These meetings demonstrate that from July through November competitive retail energy suppliers have a lower complaint rate than the electric utility distribution companies and for three months had equal or fewer complaints than the cable companies also regulated by PURA," he said.

Lee said RESA is committed to working with PURA to improve results for all customers.