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Consumer Protection Legislation and Rights Against Third Party Electricity Suppliers

Read time: 6 minutes

The state of Connecticut works to promote fairness for consumers of third party electricity companies, in part, through consumer protection regulations. The equitable oversight of these suppliers contributes to affordable and sensible energy costs for CT residents.

What are Competitive Third Party Energy Suppliers?

Third party competitive energy suppliers came into being in 1998. CT lawmakers sought to make energy more affordable to residents by allowing them to choose other electricity companies over their local electricity provider. The intent was to empower consumers by giving them the ability to select an affordable company. In other words, they could choose where their energy is generated.

Third party, competitive suppliers are licensed by the Connecticut Public Utilities Regulatory Authority (PURA) to sell electricity to consumers.

However, as these companies became more competitive to gain new customers, some resorted to “illegal and deceptive sales tactics.”

Freedom of Choice For Eversource Customers

Eversource customers can choose alternate third party electric suppliers. However, they continue to receive their monthly bill from Eversource.

After making this switch, they can also choose to go back to their Eversource Standard Service. This can be done online with the transition taking two days. Current bills to date will then be prorated.

Customers should also check to see if cancellation fees from the previous electric supplier was applied.

Cancellation Fees Prohibited For Contracted Electricity Customers

Governor Lamont’s Public Act 21-117 prohibits cancellation fees for residents who were contracted with an electric supplier.

This act also grants PURA greater oversight over third party electricity providers.

Targeting Low Income Customers

Some competitive suppliers resort to unethical sales tactics promising bigger savings for new customers. However, they then lock these consumers into contracts that end up costing them more money in the long run.

PURA Offers Consumer Protections for Low Income Residents

PURA has been given discretion to prevent “hardship utility” customers from being switched to any third party competitive electric supplier.

Variable Electric Rates Banned in CT

In 2015, PURA issued a ruling that bans variable rate electric contracts in Connecticut, representing the first time this was ever done in the entire nation.

Variable electricity rates produce unpredictable cost increases month after month. Customers are usually unprepared for these price escalations.

Under these types of contracts, residents are first given an initial “teaser” rate that later expires. Afterwards, they pay according to a confusing variable rate that fluctuates each month.

Both PURA and Connecticut legislators were concerned that these cost increases produced a negative impact on the livelihood of

  • low income residents
  • struggling parents
  • fixed income seniors
  • customers using electricity for heat
  • individuals with limited English

According to PURA’s ban, third party electric suppliers must offer customers a fixed rate for four months. They can then offer renewal terms with the option of presenting a new price. However, this new rate cannot be increased for at least 4 months.

This law prohibits new contracts created with variable rate pricing by third party electric suppliers.

PURA's overarching mission is to regulate the services and rates of investor owned utility companies (natural gas, water, electricity, telecommunications etc.). The organization protects the rights of CT residents to “safe, adequate and reliable utility service” at reasonable rates. PURA also supports the rights of providers to earn a reasonable return on their investment.

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