PROVIDENCE, RI — Lt. Governor Daniel J. McKee today announced consumer protection legislation to establish new rules for third-party electric companies which have cost some Rhode Islanders millions of dollars.
Third-party electric companies have been allowed to compete with National Grid to supply electricity to Rhode Islanders since the state deregulated its electricity market in the late 1990s.
The legislation prohibits third-party companies from automatically renewing customer contracts, requires written notification of contract expiration dates and provides customers with the option to cancel services online.
With the support of Representative Brian Kennedy (D-Westerly, Hopkinton) and Senator James Seveney (D-Bristol, Portsmouth, Tiverton), Lt. Governor McKee proposed this legislation in response to a March 2018 report filed with the Public Utilities Commission showing that Rhode Islanders using third-party electric companies paid about $28 million more than National Grid’s default rate over the past five years.
In 2015, Lt. Governor McKee worked with the Division of Public Utilities & Carriers (DPUC) to launch a safe energy-shopping website called Empower RI (www.ri.gov/EmpowerRI). The website allows consumers to learn about the energy-shopping process and save on their electric bills by enrolling in a contract with a third-party company that is vetted by the DPUC.
Yet, some companies operating outside of Empower RI use high-pressure sales tactics, including door-to-door sales and telemarketing, to take advantage of consumers who may be unfamiliar with the energy-shopping process.
“Our new rules for third-party electric companies will balance the scales between protecting the consumer and promoting competition in the market,” said Lt. Governor McKee. “Our goal is to preserve safe opportunities for energy savings while ensuring Rhode Islanders are protected against predatory sales practices.”
“We know that third-party electric companies can deliver real savings for Rhode Islanders who are interested in the process of researching and switching to a third-party energy supplier. We also know that our state can do more to protect all consumers, while preserving the opportunity for savings, particularly when the contract period has expired,” said Rep. Brian Patrick Kennedy, Speaker Pro Tempore and House sponsor of the consumer protection legislation (H-5678).
“I have been through the process of using a third-party electric company and I have seen firsthand how our state can and must do more to protect consumers,” said Senator James Seveney, Senate sponsor of the consumer protection legislation (S-399).
Other New England states with deregulated electricity markets have enacted rules for third-party companies. After Maine consumers paid $77 million more than they needed to on power from 2012 to 2016, the legislature passed a consumer protection law which includes prohibiting automatic contract renewal.