Connecticut Electricity – State Outlaws Variable Price Contracts for Residential Electricity

Connecticut electricity supply for residential customers will finally be safer to contract. The Connecticut Senate passed a bill this week to ban variable electric contracts for residential customers.

SB 573 as amended provides that, “On and after October 1, 2015, no electric supplier shall (A) enter into a contract to charge a residential customer a variable rate for electric generation services; or (B) automatically renew or cause to be automatically renewed a contract with a residential customer and, pursuant to such contract, charge such customer a variable rate for electric generation services.”

As noted by the language further below, the bill does contemplate that Connecticut electric suppliers will be permitted to change a month-to-month rate to customers at the end of a fixed term contract, but subject to notice requirements and likely limits on the amount of rate increases during such month to month service, as to be determined by PURA.

Existing variable rate contracts would be permitted to continue through their existing term, but could not be automatically renewed beyond October 1.

The bill defines “residential customer” to mean a customer who contracts with a Connecticut electric supplier for generation services at residential premises for domestic purposes only.

The bill would require that before October 1, 2015, the Public Utilities Regulatory Authority shall initiate a proceeding to develop recommendations and guidance regarding, “(1) what type of generation services rate structure is best suited for residential customers who allow a fixed contract with an electric supplier to expire and begin paying a month-to-month rate for generation services from such supplier; and (2) what rate increase is just and reasonable if a generation services rate increase is necessary after the expiration of a fixed contract and such customer begins paying a month-to-month rate.”

The authority shall report the findings of such proceeding to the joint standing committee of the General Assembly having cognizance of matters relating to energy, on or before January 1, 2016.

Senate leadership described the bill as passed yesterday. Technically, the bill was placed on the consent calendar, where passage is assured. SB 573 will await action in the House