Legislation Would Undo Consumers' Choice Of Electricity Provider

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Correction appended

You might not know it, but you have the power to choose your electricity provider.

At least for now.

Since the state legislature deregulated the electricity market a decade ago, customers have had a choice between signing up with their region's major power company — Connecticut Light & Power Co. or United Illuminating Co., depending on the service area — or shopping among a handful of third-party power suppliers. The vast majority of customers, about 97 percent, have chosen to stick with the major utility companies.

And legislation approved Wednesday by the state House of Representatives would keep them there, without the option of shopping around — but perhaps with lower prices.

State Rep. Vickie Nardello, D-Prospect, and House Speaker Chris Donovan are proposing a change to state regulations that would eliminate the ability of small business and residential electric customers to buy from a third-party supplier. CL&P and UI would instead contract directly with power generators to supply electricity to all customers with a maximum demand of less than 100 kilowatts at any given moment.

Donovan, D- Meriden, described the proposal as "a real choice for consumers" that would drive down rates by at least 5 percent.

"We're looking at ways to help businesses to grow, and energy is one of those drags on growth," he said Wednesday.

The bill passed mostly along party lines, with the Democratic majority providing the winning margin. The legislation still requires Senate approval.

Power suppliers currently include "supply cost premiums" in the prices they quote to electricity shoppers to protect themselves from over- or under-buying electricity for a rapidly changing customer base, Nardello said. If utilities were to shop for the power needs of small business and residential customers as a whole, it would work on behalf of a reliable customer base that removes the need for such premiums, she said.

Under the proposal, utilities would also be allowed to negotiate multiyear contracts directly with power generators, rather than dealing with third-party suppliers who buy and resell power — cutting the expense of "the middleman," she said.

"This way, the utility says, 'I've got this many customers. This is the load. This is how long we're going to be with you. Give me a price,'" said Nardello, co-chairwoman of the state legislature's energy and technology committee.

Those who are already contracting with a supplier other than CL&P or UI would retain that choice, but all others would automatically be transferred into this new pool of customers.

"We'll get to see who does a better job," Nardello said.

The proposal has garnered support from several state officials and trade groups, including state Attorney General Richard Blumenthal, Consumer Counsel Mary Healey and the Manufacturing Alliance of Connecticut. But it has also drawn fierce opposition.

In testimony filed in February, Donald W. Downes, chairman of the state Department of Public Utility Control, said it would "create strong opposition and resentment from customers."

This article has been revised to reflect the following correction

A bill before the state Senate proposes eliminating the option for electricity customers to buy from a third-party supplier if they have a maximum demand of less than 100 kilowatts at any given moment. A story on Page A20 April 30 reported incorrectly that the bill would pertain to those with a maximum demand of less than 500 kilowatts.

Copyright © 2014, Los Angeles Times
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