State regulators, in a renewed attempt to keep low-income customers from paying more for their energy than their utility would charge, have barred energy marketers from selling natural gas or electricity to those consumers.
The state Public Service Commission issued the ban this week, ordering independent energy suppliers stop signing up low-income consumers for electric and natural gas service and return the low-income customers that they already have to the local utility.
The order, which takes effect in mid-February, affects about 173,000 low-income residential electric customers and about 108,000 low-income residential gas customers statewide who currently purchase their energy from a marketer.
With utilities regularly charging less than marketers for energy, the state Public Service Commission last month said it is launching a comprehensive review of the state’s deregulated energy markets. A recent PSC staff report found that, during the 2 1/2-year period that ended in June, residential consumers who buy their electricity and natural gas from a marketer paid a combined $96 million more than they would have if they had been customers of their local utility.
The PSC tried to initiate a similar ban in July, but it was quickly put on hold by a state judge after it was challenged in court by energy services companies.
Bryan Lee, a spokesman for the Retail Energy Supply Association, expressed disappointment in the PSC ban. Many marketers offer pricing plans that allow consumers to lock in the price of their gas or electricity, while utility prices typically vary from month to month.
“The PSC has ample oversight authority to exercise without taking an overly broad approach that denies the benefits of the competitive market to an entire class of customers,” Lee said. “The PSC just acted to limit low-income customers to variably priced utility service that exposes them to price risk in the market.”