The Connecticut Department of Public Utility Control has reformed the state's electric market to give customers a chance to save money on their electric bills through choosing an alternate electric supplier. Customers at Connecticut Light and Power and United Illuminating can shop for a cheaper electric supply rate.
The state had utilities sell their power plants to open up the industry to competition. Utilities now only own the transmission and distribution wires, while also providing "backstop" power to customers who do not shop for electricity. With the move to competition, Connecticut utilities have separated their service into two parts:
- Regulated distribution of power, which is still only provided by the utility, and
- Supply of the electric commodity, which is open to competition.
Customers can choose to receive their electricity supply from their utility, or an alternate electric provider.
In Connecticut, customers who do not choose an alternate electric provider receive default supply from the utility, with the type of service depending on the customer's size.
Residential customers and business customers using less than 500 kilowatts (kW) receive "Standard Service," which is a supply rate from the utility that is fixed for six months. Utilities buy supply for these standard service customers throughout the year and ladder the procurements into a blended price, which is meant to decrease volatility. That means the utility price can be higher than today's market prices, if the market price has gone down but the utilities had bought power months ago when the price was higher. Choosing an alternative electric supplier allows customers to receive the benefit of falling prices faster.
Business customers over 500 kW receive "Last Resort Service," which changes every month. The Last Resort Service price is a market rate based on quarterly auctions in the wholesale market. As such, the Last Resort rate can be quite volatile. Customers can avoid this volatility by contracting for a fixed rate from an alternative electric supplier.
Customers who choose an alternate energy provider still have their power delivered to them by their local utility, and contact their utility for all outage reporting. Depending on their service area, customers can choose to receive either a single bill from their utility for their delivery service and energy supply service, or can receive two bills, one from each company.
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