May 04 - Waterbury Republican-American, Conn.

Electric choice will survive another year.

A rift between the House and Senate co-chairmen of the state legislature's Energy and Technology Committee is expected to doom a proposal to end residential and small business consumers' ability to choose an alternate supplier for electricity.

Sen. John W. Fonfara, D-Hartford and co-chairman of the committee, said Friday he won't raise the bill for a vote in the Senate before the session ends, effectively killing it. The proposal was an amendment offered by Rep. Vickie O. Nardello, D-Prospect and co-chairwoman of the committee. It was attached to energy legislation that was overwhelmingly approved in the House earlier this week

"I do not support it," Fonfara said of the amendment. "I do not intend to call the bill."

The proposal would force residential and most small businesses, beginning next year, to buy electricity from one of the state's two largest utilities, Connecticut Light & Power or United Illuminating. Residential consumers and small businesses who buy electricity from an alternative supplier would be allowed to continue to do so until their current contracts expire.

The competitive retail market for electricity was created after the state deregulated the industry about 10 years ago. The state also forced CL&P and UI to sell their power generating plants and serve solely as power distributors. Consumers or businesses who switch to alternate suppliers still receive a bill from their utility, but the portion of their monthly payment that goes toward power generation is turned over to the chosen supplier.

Nardello called the amendment a compromise, saying it preserves competition for the largest power users, commercial and industrial companies, who get the largest benefit. She said forcing customers back to the utilities would reduce the utilities' rates by 5 percent, because a "risk premium" is built into the rate to cover losing customers who switch.

Fonfara, however, said the proposal would hurt the very people it intends to help.

The bill "literally would cause a rate hike for residential and small business customers," he said. "I don't know anyone who would have chosen voluntarily to ... go into the competitive market unless they were going to get a lower rate."

Alternative suppliers say customers can save anywhere from 8 percent to as much as 20 percent off the generation portion of their bills, which makes up more than 60 percent of the average bill, according to state data. As of March, however, only about 145,000 residential and business customers, or roughly 10 percent, had switched to alternative suppliers.

Alternative suppliers say they can offer lower rates because they constantly seek better prices from generators and react quickly to changes in generation costs. The utilities are allowed to bid on power generating contracts only twice a year.

Fonfara said legislation passed last year made it mandatory for CL&P and UI to inform customers about the option to choose an alternate supplier, and that is just starting to have the desired effect.

In addition, he said, electric choice has attracted more companies to the state, and caused others to start up here, in order to compete for customers. The state Department of Public Utility Control lists more than two dozen companies competing for customers.

One recent startup is Positive Energy LLC in Middlebury, which was certified as a power aggregator in March by the DPUC. An aggregator helps find customers for power generators and suppliers.

Joseph Ventura, president of Positive Energy, said his company already has 45 salespeople on staff, and plans to hire as many as 125 more in the next three months. That would change if the legislation were approved, he said.

"It would be a tremendous blow for us," Ventura said. "A big part of our business is offering residential and business customers a lower rate. It would hurt the citizens of Connecticut, because they wouldn't have the opportunity to lower their bills, and it will prevent us from hiring more salespeople."

Fonfara said that won't happen.

"People are struggling, making choices between paying electric bills and feeding their families," he said. "Small businesses are struggling to stay alive. I'm not going to be part of anything that will make their rates go up."

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Copyright (c) 2009, Waterbury Republican-American, Conn.

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(c) 2009, McClatchy-Tribune Information Services