The impacts of the recent, unprecedented Polar Vortex have highlighted the potential for improvements so that customers are better protected from extraordinarily high energy bills during short term market events. Direct Energy, North America's largest energy and energy-related services provider, is announcing that effective immediately, the Company will add a price protection feature to its current residential electric variable rates in each Connecticut utility service area in which the Company serves. This combines the flexibility of a month-to-month plan with protection against extraordinary price spikes.
Direct Energy's price protection levels for its residential electric variable rates in Connecticut range from 14.7 cents per kilowatt-hour to 15.7 cents per kilowatt-hour, depending on the utility service area, and the Company is committing to these price protection levels for a six month period. Direct Energy's specific maximum variable rates with price protection for the Connecticut utility areas in which Direct Energy serves residential customers are as follows:
- Connecticut Light & 15.7 cents per Power Company: kilowatt-hour
- United Illuminating 14.7 cents per Company: kilowatt-hour
By offering this level of price certainty, Direct Energy will continue to serve its customers with competitive pricing which may be lower than, but will not exceed these levels during this period.
After the initial six month period, to the extent that Direct Energy determines it needs to adjust these price protection levels, Direct Energy also commits to provide its residential customers with a minimum of 30 days advance notice prior to making a change so that customers may make informed decisions regarding which plan is right for them.
Direct Energy has been working closely with stakeholders to enhance the competitive marketplace across the state. In addition to its voluntary actions announced, Direct Energy is proposing the following improvements to the state's competitive retail energy market to enable customers to have both choice and control of their energy bills:
- A new standard for retail suppliers to offer residential variable electric rates with price protection. Direct Energy believes that all retail suppliers should provide a specific cents-per-kilowatt-hour maximum variable rate for any residential variable electric price products and provide customers 30 days advance notice of any changes the retail supplier makes to that price protection level. This gives customers the ability to make better budgeting, shopping and switching decisions.
- Clearer customer disclosures. Direct Energy believes all suppliers should be required to identify and communicate clearly to customers all pricing and term information, any early termination penalties and the details for how the supplier will serve the customer after the expiration of any initial contract period.
- Accelerated switching to retail suppliers. Currently, when a customer wants to change retail suppliers, the process can take one to two billing cycles to complete. Direct Energy supports working with stakeholders to make efforts to ultimately move to a same-day switch model that will directly benefit electricity consumers seeking alternative pricing option.
- Full smart meter deployment and timely access to usage data. Smart meters enable retail suppliers like Direct Energy to offer advanced products and services that reward customers for managing their consumption to avoid high cost times of day. This not only fosters greater customer empowerment and engagement but also gives customers more control of their energy usage and bills. Direct Energy already offers several innovative products that use smart technology to help customers manage their energy use, which can be particularly helpful during unpredictable weather conditions. Full smart meter deployment would enable Direct Energy and other suppliers to offer more of these types of products and services across the state.
"Direct Energy has listened to our customers and we believe these proposed improvements will make the retail market a more simple, friendly and direct environment for all customers to better realize the benefits of competition," said David Hindman, vice president and general manager of Direct Energy's U.S. residential business. "In addition to these priority areas, Direct Energy also supports enhancements that include increasing the financial fitness standards for retail suppliers, stronger enforcement against suppliers and sales representatives that violate customer protection regulations, and new measures to promote fixed price contracts."
"We continue to work to provide integrated home services and cost-effective energy products within competitive markets because we understand the benefits they can bring to our customers," Hindman added.
- The residential electric variable rate price protection does not include incremental services procured including but not limited to: green products, rewards, home services or other non-energy related items.
- The residential electric variable price protection levels are the absolute highest rates pending any future regulatory or legislative changes that impose greater costs on retailers.
- The rates indicated above will automatically go into effect. Current Direct Energy customers do not need to voluntarily enroll.
About Direct Energy
Direct Energy is one of North America's largest energy and energy-related services providers with six million residential and commercial customer relationships. Direct Energy provides customers with choice and support in managing their energy costs through a portfolio of innovative products and services. A subsidiary of Centrica plc (LSE:CNA), one of the world's leading integrated energy companies, Direct Energy operates in 46 U.S. states plus the District of Columbia and 10 provinces in Canada.