Dive Brief:

• Connecticut lawmakers have approved, and the governor is expected to sign, legislation which would prohibit utilities signing residential customers to new variable rate power contracts.
• The legislation, which does not target industrial or commercial consumers, would also not impact existing contracts.
• Lawmakers say several "bad actors" have been taking advantage of residential customers by offering low set rates initially, and then rolling those over into variable contracts which are unfair to the consumer. 

Dive Insight:

Connecticut's House of Representatives has voted 144-1 to ban new variable rate power contracts, seeking to place limits on some companies which have taken advantage of the state's deregulated market.

"It's time to protect consumers from the duplicitous variable, Rep. Lonnie Reed (D) told the Hartford Courant. "There has been some bad behavior from what I would call some bad actors. It's really being used to fleece people."

The measure, which would take effect in October, is expected to be signed by Gov. Dannel Malloy (D). The state's Senate passed a version last week.

While the bill would ban new contracts with variable rates, the Courant points out that the main reason customers wind up with variable rate plans is because they sign contracts for lower introductory rates which then roll over to variable rates. 

Last year the state passed a law which will require, beginning this summer, that customers receive their rate for the next month on the current bill so any significant changes will be clear.

Rep. John Piscopo (R) told the Courant he worries the bill goes too far. "I have problems with this bill," he told the paper. "It's just a few bad actors. It's terrible that it happens, but most companies who offer variable rates give a good deal on fixed rates."

Consumers are showing interest in a broader range of payment and rate options. A recent survey by DEFG found interest in pre-paid energy options as consumers look to take control over their bills and avoid surprises. And the spread of smart meters has enabled a new range of rate plans and innovative payment options.