Deregulation Arrives Statewide July 1, But Visible Change Is Slow

Hartford (AP) — Starting next week, the flick of a power switch will never be the same in Connecticut, but few residents will notice any change for months.

On July 1, electric choice comes to every corner of the state, allowing residents and business owners to choose their power suppliers the way they now choose their long-distance telephone providers.

The trouble is, no companies that provide power are ready yet to sell to homeowners, and there are few options for businesses. The delay comes despite a six-month trial period that started January 1 in some of the state’s poorest municipalities.

Electric suppliers blame the slow start on market forces that have driven prices for power way above the going rate of previous years.

Also, since the state Legislature set up the new era of competition with guaranteed savings for consumers for the first three years, consumers do not have as strong an incentive to shop around for power right away.

Things are expected to heat up as the weather cools down, summer demand drops off, and prices level out, suppliers and regulators say.

“It would be nice to have a large number of suppliers ready for July 1. It’s a new system of providing electricity, and it takes a while for it to take off,” said Consumer Counsel Guy Mazza, who represents consumers in utility matters.

In the meantime, residents can get educated about what electric choice means for them.

The Department of Public Utility Control has mailed out a consumer’s guide to explain deregulation. The guide includes a worksheet to help consumers calculate whether competing offers for power can save them money.

The DPUC also has hit billboards, newspapers, and the airwaves with electric choice ads, featuring a wisecracking wall outlet that touts “The choice of power. The power of choice.”

The ads also note that consumers have plenty of time to make a choice: Built-in rate decreases under the so-called “standard offer’’ are in effect until the end of 2003.

The standard offer amount, clearly marked on electric bills, is used to calculate whether competing electric suppliers are offering cheaper deals.

For a look at what the future may hold, Connecticut regulators are watching the market develop in Pennsylvania. Since electric choice started there in January of last year, about 500,000 customers have switched power suppliers – or about 1 in 10 electric customers in the state.

Some companies are offering up to 20 percent savings off of Pennsylvania’s standard offer rates, statistics from the Office of Consumer Advocate show.

Dozens of companies are licensed to provide power in Pennsylvania. Some of these companies are trying to get licensed in Connecticut. Their business strategy varies. Some aim just to serve businesses, while others try to attract homeowners and municipalities.

One of the few active players right now is Select Energy, a wholly owned subsidiary of Northeast Utilities, which is just serving businesses and municipalities now.

Residential service is some time away, since the standard offer was set with pretty low prices for consumers, said Select Energy spokeswoman Donna Powell.

“Some customers may find its advantageous to stay on the standard offer until there’s a truly more open, competitive market,” Ms Powell said.

Other companies offer “green power” – electricity generated from wind, solar, hydro, and other resources that cause less pollution and strain on the environment.

The actual electricity coming into a customer’s home is not coming directly from these sources, since all power is mixed together in regional power lines. But customers who sign up with green power suppliers are supporting these earth-friendly ways to get electricity.

Green power often costs more than power derived from burning oil, coal, or from nuclear plants, so it can come at a premium for consumers.

A major player in the green energy movement, however, is not jumping into Connecticut right away.

Vermont-based Greenmountain.com has temporarily withdrawn its license application while the company reorganizes and moves some offices to Texas, said Carrie Cullen-Hitt, the company’s director of regional business development.

Also, the company is delaying because it found Connecticut’s licensing system to be lengthy and time-consuming, and because of uncertainty about billing practices and other licensing issues.

“Folks are generally optimistic about Connecticut, but people can’t expect things to happen overnight,” Ms Cullen-Hitt said.

Several other Internet-based energy companies are trying to get licensed. Some of these dot-com companies offer electricity, telephone, cable television, and other utilities at a cheaper, package price.

Also, a homegrown cooperative plans to launch its electric business in the next few weeks for residential and small business members.

The Connecticut Energy Cooperative, based in Hartford, also offers heating oil, propane, natural gas, and telephone service to members, and can teach members how to conserve energy to save money, said the co-op’s marketing director, Robert Maddox.