Twenty-two third-party electric suppliers admitting to charging customers higher than expected rates have agreed to return a total of $9.4 million to those customers.
State utility regulators at PURA offered amnesty to civil penalties to any supplier that voluntarily admitted that it charged customers higher rates than it told them it would in the “Next Cycle Rate” section on their bills. In each case, the supplier caused the issue by failing to provide utilities with the right information, sometimes for months or years, according to PURA.
Twenty-two suppliers agreed to “amnesty agreements” that require them to return the $9.4 million they overcharged customers between Jan. 2016 and Jan. 2019, according to PURA.
Suppliers that did not cooperate could be investigated and fined if they were found to have provided incorrect rate information, PURA said.
Initial amnesty plans would have returned $4 million, but the draft decision the PURA board approved on Wednesday would return more than twice as much after PURA audited customer data.
For an average residential customer, a “next cycle rate” billing error could have resulted in a monthly overcharge of $45, according to Attorney General William Tong.
There are about 125,000 credits being applied to customer bills, though the number of affected customers may be different if customers had multiple service providers over the three year period, according to PURA. Refunds started to be applied to affected customer bills in mid-2020 and will continue through the end of the year.
Customers who receive the standard supply from Eversource or United Illuminating were not affected, only customers who have signed on with third-party electric suppliers.
The “Next Cycle Rate” was added to bills in 2016 in an attempt to improve the transparency of variable rate contracts with third party electric suppliers, which usually end up costing more than the standard service rate. It shows customers what change they will see to their rate in their next bill. In this case, the rates shown to customers were lower than what they ended up being charged.
It’s not the first time inaccurate information has affected customers of third-party suppliers. In May 2019, on a website intended to help electric customers compare supplier rates, United Illuminating posted the wrong standard rate for 20 days – during which about 3,500 customers switched from the standard service rate to a third-party supplier.
Customers of third-party suppliers should check the supply section of their bill each month and report any inaccuracies to PURA.