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OLR Bill Analysis
sHB 6526 (as amended by House "A")*
AN ACT CONCERNING ELECTRIC SUPPLIERS.
SUMMARY
This bill establishes new restrictions and requirements for electric
suppliers and expands the Public Utilities Regulatory Authority’s
(PURA) oversight of them. (Generally, Eversource and United
Illuminating customers may purchase electricity (1) directly through
the electric utilities at the standard service rate or (2) through contracts
with an electric supplier at the supplier’s rates.)
Beginning July 1, 2022, the bill (1) prohibits electric suppliers from
charging a residential customer a variable rate for electric generation
services and (2) deems any contract between an electric supplier and a
residential customer that includes variable rates null and void.
The bill prohibits supplier contracts with termination fees or early
cancellation fees for residential customers, eliminating a provision in
current law that (1) limits these fees to $50 and (2) requires the supplier
to provide the customer with an estimated average monthly bill when
offering a contract.
The bill also applies training requirements and certain other
provisions to third parties who contract with or are compensated by a
supplier’s third-party marketer.
The bill authorizes PURA to condition a supplier’s license and
access to electric distribution company (EDC) systems and billing on
terms PURA determines to be just and reasonable, including proof that
the electric supplier’s products are not overpriced or harmful to
residential customers. It expands PURA’s authority to take certain
actions affecting hardship cases or other low-income customers who
contract with electric suppliers. It requires suppliers to get PURA’s 2021HB-06526-R010677-BA.DOCX
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approval to transfer or assign customers. The bill allows PURA to
direct a portion of any civil penalty for license violations to a nonprofit
agency engaged in energy assistance programs, which the authority
names in its decision or violation notice.
The bill also makes technical and conforming changes.
*House Amendment “A” (1) prohibits suppliers from charging
variable rates to residential customers, (2) deems residential contracts
with variable rates null and void, (3) removes a prohibition on
automatic renewal provisions in supplier contracts, and (4) removes a
provision requiring suppliers to have a residential customer’s
affirmative consent in order to enter into a new contract.
EFFECTIVE DATE: July 1, 2021
§ 2 — THIRD-PARTY CONTRACTORS
Under current law, any third-party agent who contracts with, or is
otherwise compensated by, an electric supplier to sell generation
services is a legal agent of the supplier. In order to sell generation
services on the supplier’s behalf, the agent must (1) be an employee or
independent contractor of the supplier and (2) receive appropriate
training from the supplier. The bill expands this provision to also
apply to third parties who contract with or are compensated by a
third-party marketer of the electric supplier to sell generation services.
In order to sell generation services for the supplier, the bill only
requires that the third party receive appropriate training from the
supplier.
§ 3 — PURA ORDERS FOR HARD SHIP CASES
The bill expands PURA’s authority to take certain actions affecting
customers with low incomes or experiencing certain hardships who
purchase through electric suppliers. Current law allows PURA to
initiate a docket to review the feasibility, costs, and benefits of placing
these customers on standard service (supplied directly through the
EDCs), and may order this to be done in its final decision. PURA’s
docket must consider all hardship customers, customers participating 2021HB-06526-R010677-BA.DOCX
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in a matching payment program to reduce arrearages, customers
receiving other financial assistance from an EDC, or customers who
are otherwise protected by law from electricity shutoffs.
The bill expands PURA’s review to also include the feasibility, costs,
and benefits of otherwise limiting the ability of these customers to
contract with electric suppliers. The bill allows PURA, in issuing its
final decision, to order all customer contracts with electric suppliers
entered into on and after a determined date to (1) not exceed the
standard service rate or (2) comply with appropriate limitations PURA
deems necessary. By law, and under the bill, if PURA issues such an
order, it must reopen the docket at least every two years.
§ 4 — RESIDENTIAL VARIABLE RATES PROHIBITED
Beginning July 1, 2022, and regardless of any other law concerning
electric suppliers or utilities, the bill prohibits electric suppliers from
charging a residential customer a variable rate for electric generation
services. Under the bill, on and after that date, any contract between an
electric supplier and a residential customer that includes variable rates
is deemed null and void.
Under current law, an electric supplier must provide written notice
of any change in a residential customer’s electric generation price
between 30 and 60 days before their fixed price term expires. The bill
instead requires the supplier to provide this notice for the contract’s
expiration. The new contract must contain a cover page highlighting
each change from the previous contract, in a format PURA prescribes.
Under current law, suppliers must notify a residential customer of
any rate change that is 25% more than the original contract price 15
days before the change takes effect. However, this notification
requirement only applies to the first instance of such a rate increase.
The bill (1) removes this limit on notices, (2) moves up the notice
deadline to 30 days before the change takes effect, and (3) additionally
applies this notice requirement when the rate change is more than the
first price term offered in the contract. 2021HB-06526-R010677-BA.DOCX
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§ 6 — CUSTOMER ASSIGNMENTS AND TRANSFERS
By law, suppliers must receive PURA’s approval to transfer a
license. The bill additionally requires them to do so to transfer or
assign customers to another electric supplier. Under the bill, for both
license transfers and customer transfers and assignments, suppliers
must notify PURA at least 30 days before the assignment or transfer
effective date.
The bill allows PURA, upon review, to require certain conditions or
deny customer assignments or transfers. It requires PURA to approve,
modify, or deny customer assignments or transfers within 30 business
days of its receipt of the supplier’s notice, unless the authority and
supplier agree to a specified time extension, otherwise they are
deemed approved. Under current law, PURA may assess additional
licensing fees to pay the administrative costs of reviewing a supplier’s
license transfer request. The bill allows PURA to assess these fees for
customer transfers as well.
COMMITTEE ACTION
Energy and Technology Committee
Joint Favorable Substitute
Yea 24 Nay 2 (03/11/2021)