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Lt. Governor McKee, Legislators Outline New Law Aimed at Preventing Millions of Dollars in Overpayments by Rhode Island Electric Customers

PROVIDENCE, RI Lt. Governor Daniel J. McKee was today joined by Representative Brian P. Kennedy, Speaker Pro Tempore of the House (D-Dist. 38, Hopkinton, Westerly), Senator James A. Seveney (D-Dist. 11, Bristol, Portsmouth, Tiverton) and Kevin M. Lynch, Acting Administrator of the Division of Public Utilities and Carriers to highlight a new law which creates protections for Rhode Island consumers using competitive electric supply companies as an alternative to National Grid. The law, proposed by the Lt. Governor, has the potential to prevent electric customers from being overcharged millions of dollars by competitive suppliers.

Since the late 1990s, Rhode Islanders have been able to use competitive suppliers to secure electric rates that are lower than National Grid's Standard Offer. Yet, a March 2018 report filed with the Public Utilities Commission [r20.rs6.net] showed that while some consumers using competitive electric suppliers saved money, others unknowingly paid nearly $28 million more than National Grid's Standard Offer over the previous five years.

Beginning on August 1, 2019 the new law will prohibit competitive suppliers from automatically renewing residential contracts. This provision addresses the concern that consumers were losing track of their contract end dates, being automatically enrolled in a higher rate with a competitive supplier and paying more for electricity than if they had remained on National Grid's Standard Offer service.

Competitive suppliers are also now required by the law to provide residential customers with written notification of contract expiration dates and the option to cancel services online.

"Consumers need to know the competitive electric supply marketplace is safe and transparent to give them the confidence to shop their electricity and secure savings safely," said Lt. Governor McKee. "Implementing a few, common sense provisions will save Rhode Islanders millions of dollars in unintended energy costs and help prevent some companies from taking advantage of consumers through aggressive sales tactics. I am grateful for Representative Kennedy and Senator Seveney's dedication to protecting consumers and the Division of Public Utilities' collaboration which helped us get our legislation over the finish line."

"Our new consumer protection law will help prevent many local competitive electric supply customers from unintentionally overpaying on their electric bills. The law strikes a fair balance between creating a safer marketplace and preserving the opportunity for consumers to save money through competitive supply and ensures that at the end of a contract, the consumer will return to the Standard Offer automatically," said Representative Kennedy, Speaker Pro Tempore and House sponsor of the consumer protection legislation (House Bill 5678 [r20.rs6.net]).

"As a consumer who went through the process of switching to a competitive electric supplier, I saw firsthand where our state could step up and better protect Rhode Islanders in this market. I am glad the legislature supported our effort to create new safeguards and I look forward to seeing what more we can do to protect consumers across our state," said Senator Seveney, Senate sponsor of the consumer protection legislation (Senate Bill 399 [r20.rs6.net]).

"The Division believes there is a role for competitive suppliers, not only in the current market, but potentially in the future where suppliers may be able to offer value-added services," said Kevin Lynch, Acting Administrator of the Division of Public Utilities and Carriers. "The provisions included in this legislation afford significant protections that assist consumers in making and executing informed choices."

Lt. Governor McKee plans to work with the Division of Public Utilities and Carriers, legislators and the Attorney General's Office to further combat predatory door-to-door and telemarketing sales practices in the competitive energy supply market.

Governor Raimondo signed House Bill 5678 and Senate Bill 399 into law on July 16, 2019.

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