Slossberg supports legislation banning variable-rate electricity contracts

State Senator Gayle S. Slossberg (D-Milford) last week joined the AARP, the State Consumer Counsel and fellow legislators in supporting a ban on variable-rate electricity contracts.
Testifying before the legislature’s Energy and Technology Committee Slossberg cited consumer anger and frustration as a key reason in her supporting Senate Bill 573, which would ban variable rates charged to residential electric customers for electric generation service.
Sen. Slossberg also submitted testimony in support of Senate Bill 575, An Act Concerning Electric Rate Transparency. That legislation will require that more opportunities for public comment are provided by the state’s Public Utilities Regulatory Authority (PURA) when deliberating on proposed rate hikes.
“I have often been contacted by constituents who have signed electric contracts expecting one rate, only to see that price skyrocket down the road. They are angry and frustrated,” said Sen. Slossberg. “Our proposed bill will end this unfair and unreasonable practice, and better protect our families.”
“Variable-rate plans can easily hurt the average consumer, particularly vulnerable seniors,” said Senate President Martin M. Looney (D-New Haven). “Some suppliers have engaged in deceptive marketing practices to sell these unpredictable plans, and have then extracted unconscionably high profits from Connecticut consumers.”
If enacted, Senate Bill 573 would ban variable rates charged to residential customers, banning the practice of offering a low “teaser” rate by a sales agents who would then allegedly misrepresent how high rates could go up on the customer.
At a recent hearing on the subject, customers documented that their rates increased from that teaser rate to an increase of over 100% in every case and over 200% in some cases.
These customers, many of them senior citizens, claim they had no notice of the rate increases until the bill arrived and payment was demanded using the threat of disconnection of service if payment wasn’t made.
Last year the General Assembly passed Public Act 14-75, which enacted several reforms for the protection of electric consumers. One of these measures was a new requirement that, beginning in July 2015, every residential electric customer’s monthly bill must display their rate for the coming month.
Even though last year’s consumer protection law was intended to provide customers advance notice of an unexpected and potentially dramatic increase in their electric rate, some say the legislation still left consumers vulnerable to extreme and unexpected rate hikes.
“Even with the electric customer bill of rights passed last year in Connecticut, you can still fall prey to predatory variable rate contracts of some electric suppliers,” said John Erlingheuser of Connecticut AARP.  “These contracts have been shown to end up costing ratepayers more over the life of the agreement.”
“Electricity is not a luxury; it is a necessity for health and safety,” said Erlingheuser. “We need to level the playing field and further protect electric consumers in Connecticut by banning variable-rate contracts.”