Consumer protections promised, not yet delivered in CT

CT Mirror

Nora Duncan, state director of AARP Connecticut, presenting poll results.

Consumers’ groups delivered a reminder to legislators Monday about their high expectations for still-developing legislation that leaders promise will protect the public against bait-and-switch marketing by third-party electric suppliers.

With the release of a poll supporting their call for new consumer protections, AARP, Connecticut Citizen Action Group and ConnPIRG gave a nudge to the General Assembly’s leadership, which has promised a strong consumer bill, but has not produced a substantive draft. The session ends May 7.

“We’re not close yet,” said Sen. Robert Duff, D-Norwalk, co-chairman of the legislature’s Energy and Technology Committee, which is working on the bill. “We want to make sure we listen to as diverse a group as possible.

On March 18, the committee unanimously approved and sent to the Senate floor a version of the bill that would deliver only a study, but lawmakers say the legislation is a work-in-progress that will be revised to provide significant consumer protections before it comes to a vote in the Senate.

“It’s definitely a priority of ours,” said Adam Joseph, a spokesman for the Senate Democratic majority. “We are working with different stakeholders to refine language.”

Duff said the bill also is the top priority of his committee.

Update: Gov. Dannel P. Malloy, Attorney General George Jepsen and Elin Katz, the consumer counsel, are holding a press conference Tuesday on complaints about electric suppliers.

AARP, which claims 600,000 members in Connecticut, released a survey of residents age 50 and older that found a strong majority concerned about the cost of electricity, with 71 percent saying elected officials are not doing enough on the issue.

Once known as the American Association of Retired Persons, AARP has rebranded itself as a consumer organization representing one of the most desirable demographics in politics: voters age 50 and older, who tend to vote in higher proportions than other age demographics. It historically has been the best-funded advocacy group in the United States.

Its political muscle was evident Jan. 31, when legislators led by Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, and House Speaker J. Brendan Sharkey, D-Hamden, lined up with AARP members at the Capitol to endorse stronger regulation of third-party electric suppliers, a frequent source of consumer complaints to the state Public Utilities Regulatory Authority.

Depending where they live, most consumers in Connecticut get their electric service from one of two major utilities, Connecticut Light & Power or United Illuminating, or they can sign up with one of the competitive third-party suppliers.

Consumers groups say that many third-party suppliers are hyper aggressive, enticing customers with introductory or variable-rate offers that undercut the so-called “standard offer,” the prices charged by CL&P and UI. But the rates can quickly increase — and switching back to the standard offer can be difficult.

“It is a very complicated market,” said John Erlingheuser, AARP Connecticut’s director of advocacy. Based on current standard-offer rates, the most money a typical homeowner can save by signing up with a third-party supplier is just $60 a year, he said.

Tom Swan, the executive director of the Connecticut Citizen Action Group, said the savings are so small and the risks to consumers so high that the legislature should close off the third-party market if the state cannot provide adequate consumer protections.

About 75 percent of complaints to PURA are about third-party electric suppliers.

The industry has endorsed at least some consumer protections.

“Customers clearly need to get more effective notice regarding variable pricing,” said Chris Kallaher, the senior director of government regulator affairs for Direct Energy. “We definitely support giving customers more notice.”

AARP says the industry desperately needs a strong truth-in-contracting law that allows consumers to easily make direct and meaningful comparisons on price. PURA should be given greater power to enforce whatever consumer standards are enacted.

The poll released Monday showed that 82 percent of residents age 50 or older were solicited in the past year by an electric supplier. Phone and direct-mail solicitation are most common, but 13 percent reported a sales representative coming to their door.