O F F I C E O F L E G I S L A T I V E R E S E A R C H
P U B L I C A C T S U M M A R Y
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PA 21-117—sHB 6526
Energy and Technology Committee
AN ACT CONCERNING EL ECTRIC SUPPLIERS
SUMMARY: This act 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 utilities at the standard service rate or
(2) through contracts with an electric supplier at the supplier’s rates.)
Beginning July 1, 2022, the act (1) prohibits electric suppliers from charging a
residential customer a variable rate for electric generation services and (2) deems
any contract between a supplier and a residential customer with variable rates null
and void.
The act prohibits supplier contracts with termination or early cancellation fees
for residential customers, eliminating a provision in prior law that (1) limited
these fees to $50 and (2) required the supplier to provide the customer with an
estimated average monthly bill when offering a contract in order to assess the fee.
It 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 act 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 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 also requires suppliers to get
PURA’s approval to transfer or assign customers.
If a supplier failed to comply with a licensure condition or violated licensure
requirements, prior law required PURA to (1) issue civil penalties, (2) suspend or
revoke the supplier’s license, or (3) prohibit the supplier from accepting new
customers. The act requires PURA to take all three of these actions. It also 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 act also makes technical and conforming changes.
EFFECTIVE DATE: July 1, 2021
§ 2 — THIRD-PARTY CONTRACTORS
Under existing law, any third party who contracts with, or is otherwise
compensated by, an electric supplier to sell generation services is a legal agent of
the supplier. To sell generation services on the supplier’s behalf, prior law O L R P U B L I C A C T S U M M A R Y
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required the agent to be the supplier’s employee or independent contractor and to
receive appropriate training from the supplier. The act (1) expands this provision
to also apply to third parties who contract with or are compensated by a third-
party marketer of the supplier to sell generation services and (2) eliminates the
requirement that the third party is an employee or independent contractor.
§ 3 — PURA ORDERS FOR HARD SHIP CASES
The act expands PURA’s authority to take certain actions affecting customers
with low incomes or experiencing certain hardships who purchase through electric
suppliers. Under existing law, PURA may initiate a docket to review the
feasibility, costs, and benefits of placing these customers on standard service
(supplied directly through EDCs) and may order this to be done in its final
decision. The docket must consider all hardship customers and customers
participating in a matching payment program to reduce arrearages, receiving other
financial assistance from an EDC, or who are otherwise protected by law from
electricity shutoffs.
The act 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. It also 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 act, if PURA issues the
order, it must reopen the docket at least every two years.
§ 4 — RESIDENTIAL CONTRACTS AND RATES
Beginning July 1, 2022, and regardless of any other law concerning electric
suppliers or utilities, the act prohibits electric suppliers from charging a residential
customer a variable rate for electric generation services. Under the act, on and
after that date any contract between a supplier and a residential customer that
includes variable rates is deemed null and void.
Prior law required an electric supplier to provide written notice of any change
in a residential customer’s electric generation price between 30 and 60 days
before the fixed price term expired. The act instead requires (1) the supplier to
provide this notice for the contract’s expiration and (2) any new contract to have a
cover page highlighting each change from the previous contract, in a format
PURA prescribes.
Prior law also required suppliers to notify a residential customer of a rate
change that was 25% more than the original contract price 15 days before the
change took effect. But this notification requirement only applied to the first rate
increase. The act (1) removes this limit on notices, (2) moves out the notice
deadline to 30 days before the change takes effect, and (3) additionally applies
this notice requirement when the change is more than the first price term offered
in the contract. Existing law requires suppliers to provide these notices through
whichever method the customer agrees to in the contract (e.g., e-mail or text O L R P U B L I C A C T S U M M A R Y
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message). The act requires the supplier to keep documentation of the notice’s
original communication method.
§ 6 — CUSTOMER ASSIGNMENTS AND TRANSFERS
By law, electric suppliers must receive PURA’s approval to transfer a license.
The act additionally requires them to receive it to assign or transfer customers to
another supplier. Under the act, for both license transfers and customer
assignments or transfers, suppliers must notify PURA at least 30 days before the
effective date of assigning or transferring customers.
The act allows PURA, upon review, to require certain conditions or deny
customer assignments or transfers. It deems a customer assignment or transfer
approved if PURA fails to approve, modify, or deny it within 30 business days
after receiving the supplier’s notice unless PURA and the supplier agree to a
specified time extension. Under existing law, PURA may assess additional
licensing fees to pay the administrative costs of reviewing a supplier’s license
transfer request. The act allows PURA to also assess these fees for customer
transfers.