Notice For Customers Who Return to Compact’s Supply

Consumer Notification –

For the First Time in 9 Years, Customers Returning to Compact May be Placed on Different Rate

As colder weather hits New England, increasing strain on the region’s natural gas transmission infrastructure is pushing natural gas and electricity rates much higher (see graph below). Such price swings often drive consumers that were being served by another competitive supplier, perhaps on a monthly variable rate to find better prices. Switching from product to product can be problematic for competitive suppliers, however. Power supply options that fix electricity prices for six months or more, such as Cape Light Compact’s and NSTAR’s basic service, rely on customers to be around during months when electricity is relatively expensive and relatively cheap. When some customers switch from product to product, trying to avoid paying for these expensive months, it can raise the cost for other consumers.

Because of this dynamic, while customers may leave Cape Light Compact’s power supply any time without a charge, the Compact’s current contract w/ ConEdison Solutions (CES) allows CES to place customers returning from other competitive suppliers on a different rate. Because of the dramatic increase in electricity prices experienced this winter, CES has informed the Compact for the first time over the past 9 years that they choose to exercise this right, placing customers that left the Compact’s supply option and are now seeking to return on a different rate. Again, this is because it would force prices for all consumers up if some consumers were allowed to be on the Compact’s fixed-rate option during expensive months, and then switch to other competitive supply options during less expensive months. Because of this consideration, NSTAR’s tariff allows them to do something similar, charging customers for expensive months if they switch back to NSTAR’s fixed price offer. Ultimately, it becomes a question of what is fair for the vast majority of customers that stay on the Compact’s rate.

The Compact and CES are still working through the details, but wanted to make sure this information is available. If you’re currently receiving your power form another competitive supplier, are considering switching to the Compact’s supply, and have questions, please contact Stephan Wollenburg, the Compact’s Power Supply Planner at 508-375-6623 or swollenburg@capelightcompact.org.

Thanks, and Happy Holidays!

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