Electricity deregulation: More than one outlet to plug into
Last week's snowstorm brought an early taste of winter — and a foreshadowing of heating bills to come. For consumers looking to save costs, the state offers information on how to take advantage of Connecticut's deregulated electricity industry.
Passed by the state legislature in 1999, the deregulation allows consumers to choose energy suppliers or generators outside of the large utilities such as CL&P and United Illuminating.
The goal was to bring down electric costs for consumers by allowing other companies to enter the marketplace and compete with the utilities on the generation charge, according to Art Marcelynas, a LEED rate analyst for the state. The program has gotten some results, but Mr. Marcelynas said it "needs a bit of fanfare and thunder. Not enough people know about it."
As of June of this year, about 713,000 CL&P and UI customers, or about 46% of all customers, have chosen an alternative electric supplier — and are saving money in the process. Mr. Marcelynas said approximately 37 companies are listed on the state website, which provides information about deregulation.
Wiltonian Janet Widgren and her family switched to one such company, Discount Power of Shelton. "I switched to Discount Power at the end of 2010," Ms. Widgren said. "Before the switch, I was with CL&P. I think on average I saved about $10 per month on my electric bill after switching. You still receive just one bill from CL&P or UI so the process is fairly transparent after you enroll."
Ms. Widgren said the enrollment process was "easy. I enrolled through their website, but I understand that you can also call them and enroll on the phone."
There is no cost to switch, according to Mr. Marcelynas. "It's a seamless transition."
He also said the savings Ms. Widgren realizes on her energy bill is typical for consumers who switch to other energy options, and the savings can add up.
"If you saw a $10 bill lying on the sidewalk, would you stop and pick it up or step over it?" he asked.
Mr. Marcelynas said the energy generation charge is the only part affected by Connecticut's restructuring law. Instead of being owned by CL&P or UI, power generation is owned by independent, competitive companies. However, power is still transmitted through poles and wires owned by the two "distribution companies," or CL&P and UI.
These two utilities actually "encourage customers to obtain lower rates because lower energy costs benefit everyone in Connecticut," Mr. Marcelynas said.
David Gable, president and CEO of Discount Power, said his company's goal is to "save the consumer 10% on the generation portion of their power bills. ... By creating a small competitive business, we are able to provide the generation portion of the consumer's electricity less expensively than the standard utility companies who have to underwrite the significant legacy costs of their operations," he said.
"For you as a consumer, deregulation means that you no longer are required to buy your actual electricity from the public utility," said Mr. Gable. "You have a choice to buy it from either the utility or a licensed supplier. Most times, a supplier's rate for the electricity is less per kilowatt hour than the utility rate, meaning you can save money by switching to a licensed supplier."
"We just want people to know they do have choices," he said.
Mr. Gable said Discount Power currently has 35,496 active customers, with 211 in Wilton.
After the two recent storms, Mr. Gable said, a common question is, If the power goes out, do customers with different suppliers go to the bottom of the restoration list?
"The answer is no," he said. "The utility will not treat you differently because you are with a licensed supplier. The order in which they restore power has nothing to do with whom you are buying power from."
Like CL&P and UI, Discount Power is required by the state to provide 16% of the electricity it purchases from green sources such as wind and solar, essentially the same as the utilities. "We are always looking to find more sources of 'green' energy," Mr. Gable said.