The Middletown Press (Middletown, CT)
In fracas with state over $50 fee, corporate fault lines visible
Companies that bill for electricity service as alternatives to utility service are digging in their heels at demands of Attorney General William Tong, who insists they scrap early a $50 fee for early termination of service during the coronavirus crisis for any customers seeking lowercost options for electricity.
The mounting docket of Connecticut filings is providing an early glimpse into the behind-the-scenes wrangling across corporate
America, as businesses attempt to preserve a portion of their revenue flows during the outbreak of the novel coronavirus COVID-19, while looking themselves for any wiggle room on expenses for which they are on the hook under their own contractual obligations.
Two days after Gov. Ned Lamont placed Connecticut in a state of emergency in an attempt to thwart a wider spread of coronavirus, Tong asked the Public Utilities Regulatory Authority to weigh a proposed order that would cap any price increases by electric
providers for customers on variable-rate contracts, while tabling for the time being any penalties for exiting those deals.
“This is an unprecedented crisis and third-party suppliers need to understand this cannot be business as usual,” Tong stated Friday in comments forwarded by a spokesperson in his office. “We’ve seen utilities step up as good corporate citizens to protect consumers. Electric suppliers need to follow their lead. Suppliers must not be allowed to compound consumers’ economic challenges with excessive rates and termination penalties.”
Through Friday, several companies and a trade group representing their
interests had responded in the PURA docket, noting that those providers are locked into pricing contracts for the electricity they bill their own customers in turn.
But the companies balked as well at Tong’s request for a moratorium on the $50 fee for switching service, whether to Eversource, Avangrid or another supplier — even as the Connecticut utilities have pledged to waive fees for late payments during the crisis alongside several other major industries like banks, credit card providers and insurance companies.
“While waiving these fees would involve sacrifices on the part of those
entities, some will likely be willing to do so,” stated Joey Lee Miranda, an attorney in the Hartford office of Robinson & Cole representing RESA in the PURA deliberations. “Others, however, may be experiencing their own financial difficulties from the current situation . ... It would not be appropriate to expect them to jeopardize their own financial situation to do so.”
Through their own outside attorneys, companies submitting similar comments included Calpine Energy, Direct Energy and Vistra Energy, which acquired Norwalk-based Crius Energy last summer. Other RESA members offering service in Connecticut
include Constellation NewEnergy, the Verde Energy subsidiary of Spark Energy, and Starion Energy.
“While it may appear as a logical next step to suggest all prices for electric service be capped with no early termination fees or late fees, that is tantamount to rate regulation and contract infringement,” stated Alex Judd, an attorney in the Hartford office of Day Pitney, on behalf of Vistra. “[PURA’s] proposal ... discriminates against competitive suppliers and is tantamount to picking winners and losers.”
In his own comments as acting consumer counsel for the state of Connecticut, Richard Sobolewski said
supplier customers cannot come out on the losing end of the coronavirus crisis, if any alternatives exist.
“Clearly, the COVID-19 pandemic has served to reemphasize not only broad and overarching concerns about the high cost of electric service and other utilities in Connecticut but structural social and economic disparities contributing to overall social inequality,” Sobolewski stated. “Even though early termination fees are capped at $50, that amount of money is not insubstantial to someone who has lost wages or employment under the current circumstances.”