New Electric Supplier Enters State Market

HARTFORD (AP) — Another electricity supplier announced November 12 it is entering the Connecticut market, providing consumers with more competition and the prospect of lower prices.

Direct Energy said it will vie for small commercial and residential business. The Houston-based company, which has offices in Stamford and Wallingford, already serves business customers in the state.

Mike Beck, vice president and general manager of Direct Energy, said changes in the law enacted this year by the General Assembly provided a “more level playing field” for electricity suppliers.

The legislation, which revised the state’s ten-year-old energy deregulation law following a public outcry over sharply rising electricity rates, enacted incentives for energy suppliers to enter Connecticut’s power market.

The new law calls for Connecticut’s two major utilities, Connecticut Light & Power and United Illuminating, to bill customers and collect money for suppliers, which pay a fee for the collection service. Customers will not receive separate bills from a supplier and a utility.

The law also requires CL&P and UI to inform new customers of electricity suppliers that might not be as well-known locally as the utilities.

“As soon as those were passed we said Connecticut is a state we want to be in,” Mr Beck said. “We can compete fairly against the utilities.”

CL&P serves about 1.2 million customers and UI provides service to about 320,000 customers.

Direct Energy joins ConEd Solutions, a White Plains, N.Y.-based affiliate of ConEd, which also is marketing to business and residential customers in Connecticut. Christine Nevin, a spokeswoman for ConEd Solutions, said requiring the utilities to collect money from customers for suppliers was an incentive.

“It’s a reasonable approach,” she said.

Direct Energy is offering residential and small business customers a one-year contract with prices five percent less than what utilities charge. ConEd Solutions also offers residential customers a one-year contract and more flexible plans for businesses.

Another supplier, Levco Energy, a privately owned Norwalk company, has nearly doubled the number of customers this year, to about 65,000, said Edward Levene, vice president.

“The state has made improvements to the competitive situation that will benefit consumers,” he said.

The entry into the market by new electricity suppliers contrasts sharply with complaints in the past from utilities and others in the industry that low prices did not provide incentives for companies to sell power. A few small players got into the business after deregulation was approved, but soon left.

Mr Beck said lawmakers did the right thing by not reregulating electricity to keep prices down.

State lawmakers instead tried to stoke competition by setting rules for suppliers to do business in Connecticut and also changed state law to allow CL&P and UI to compete like other electric generators to build new power plants for peak demand.

Following electricity deregulation in 1998, utilities were allowed to distribute, but not generate, electricity in Connecticut.