May 4, 2013

Connecticut’s plan to auction off 800,000 residential electric supply accounts was killed after the state’s legislature approved a modified two-year state budget plan. The proposal would have added $80 million to the state’s budget over the next two years.

Under Gov. Daniel P. Malloy’s proposal, the state planned to auction off 800,000 Connecticut residential electric supply accounts in bulk amounts to competing retail electricity providers. These retail electricity providers would bid on the accounts in order to secure customers for their own profit. The state would benefit through gaining $80 million in funds through small fees built into electric supply rate pricing, which would be set during the bids. UI and CL&P, Connecticut’s two publically-owned utilities, would have continued to deliver the electricity as well as maintain electric infrastructure, send monthly electric bills, and respond to power emergencies such as downed lines and power outages.

“[I]n order to get many other things through in the budget, we had to compromise,” stated Gov. Malloy’s Chief of Staff, Mark Ojakian, when explaining the plan’s elimination from the budget. While both supported the proposal and believed it would provide overall benefit the state’s residents, Ojakian explained that it was clear that some others did not share the same beliefs. The electric auction proposal was opposed by the state’s AARP, other consumer groups, and several lawmakers, both Democrat and Republican.

The $43.8 billion budget plan was previously approved by the House but underwent negotiations –including the removal of the electric auction proposal— on Monday in the Senate in order to disrupt Republican attempts to derail the budget plan. The bill passed 19-17, with three Democrats voting against it along with Republicans.

Major issues with the electric auction proposal surrounded consumer protection plans that were not seen as completely defined. Furthermore, there was little information in proposal’s drafts to ensure that no one competitive electric supplier would win all of the bids. If this happened, it would defeat the purpose of the competition that is meant to come from electric choice in the first place.

Among other things, budget also includes spending increases for science and technology at the University of Connecticut and also increases gambling developments in order to bring in more money to the state.

Connecticut residents can still shop on their own for a retail electricity provider that offers lower rates than their default utility, either UI or CL&P. Learn more about comparing electricity rates and providers in Connecticut here.