From the The Journal – Ogdensburg, NY
When regulators opened the state’s energy market to competition, they hoped to create a robust marketplace where consumers would have ample choices that would cut their heating and electric bills.
It hasn’t worked out that way.
Instead, consumers often pay more if they buy their electricity or natural gas from an independent supplier, and thousands of those customers have complained about deceptive practices by the energy marketers.
Regulators are proposing radical changes to the state’s energy marketplace, requiring marketers to guarantee their customers will pay less than their local utilities charge.
So radical, in fact, that they could drive the independent energy suppliers out of the residential market.
The reason is simple: Utilities are required by state law to sell natural gas and electricity to their customers at cost. The marketers, to stay in business, need to sell energy to their customers at a profit.
If the new rules take effect —and they’re on hold temporarily because of a court challenge — it could force energy marketers to drop tens of thousands of customers and return them to their local utilities. The marketers warn that could deprive consumers of popular products, like fixed-price contracts that help smooth out the ups and downs that can rock energy markets.
“I think you’ll see a lot of marketers just drop out of the game,” said Bruce Heine, senior vice president at National Fuel Resources, the unregulated energy marketing arm of National Fuel Gas Co.
In the interim, marketers are holding talks with state regulators toward a compromise that will give them more flexibility in the pricing and the products they can offer, while still helping consumers find the savings that have been so elusive since deregulation took effect in the late 1990s. They’re hoping to hammer out proposals by early summer.
“The PSC created this marketplace, and the whole idea was that people would have the opportunity to shop for a better rate,” said William Ferris, AARP’s legislative director for New York.
“This marketplace has not produced the desired effect: Lower prices through competition,” Ferris said. “This marketplace just was not working for consumers in New York.”
An AARP found that consumers buying their energy from a marketer paid an average of 14 percent more than they would have paid their local utility in 2014.
