Energy assistance: Saving money to lose money?
Aug. 26—Gloria Koch, a 78-year-old New London resident, had never required heating assistance before, but last February in the midst of sky-high electric bills she decided to apply for hardship help from the Norwich-based Thames Valley Council for Community Action.
What she didn't know and couldn't understand was that by gaining that one-time assistance of $600, she also was forced to drop her alternative electricity distributor Constellation and sign on to buy power from the then much more expensive Eversource Energy. Bills that had once been about $124 a month immediately shot up to $197, she said.
It seemed to Koch that people like her were saving money to lose money. Luckily, she quickly noticed she had been switched to Eversource without her knowledge or consent, and as soon as she got her hardship check she switched back to Constellation.
"It doesn't seem right," Koch said in a phone interview. "I feel bad for other people who really have a hardship."
Koch is among hundreds of Eversource hardship customers over the past several months who have had the same issue when trying to save money by switching to alternative suppliers.
Some, like Koch, who already had another supplier, were automatically switched to Eversource after getting hardship status, while others like Diane Martin's disabled daughter Elaine of East Lyme was kicked off hardship status after switching to a third-party supplier, temporarily losing many of her Eversource benefits.
The problem is a state rule intended to help hardship customers that, during the huge Eversource price spike Jan. 1, when electric bills nearly doubled, ended up tying their hands by giving them no other option.
But help is on the way.
First, Eversource is making it easier to switch to an alternative energy source by providing an explanation of the process on its website (you can also talk through the options by calling the company at (800) 286-2828; switches will be allowed only if someone on hardship moves to the same or a lower rate). The process, though, requires customers to opt out of Eversource's hardship designation, which means that several of the company's programs to help low-income people, including winter shutoff protection, would not be available to them anymore.
Eversource also plans to roll out a new program that could allow its hardship customers to save up to 50% on their electricity bills. The company is already starting to pre-enroll qualified customers for its low-income discount rate that begins Dec. 1.
Depending on household income, the program allows for either a 10% or 50% discount off electric bills every month up to the first 1,200 kilowatt hours of electric use if the main heating source is electricity, or up to 800 kilowatt hours (kWh, as marked on bills) if the principal heat is something else.
"We are working with state regulators and evaluating the system changes needed that will enable a hardship customer to choose a third-party supplier and receive the low-income discount rate," Eversource spokesman Mitch Gross said Friday in an email. "We expect that to be available in the first quarter of 2024."
Hardship designation is not a requirement to receive state benefits. Instead, utilities use the designation for eligible customer accounts to provide people of low income certain protections and access to special programs.
These include payment forgiveness programs, budget plans and Eversource's Matching Payment Program, which will subtract a dollar from the Eversource electric bills for every dollar kicked in by customers and the Connecticut Energy Assistance Program (another source of help for hardship cases).
"The last thing we want to do is disconnect service to any customer because the fact is that unpaid energy bills increase costs for all customers," Gross said. "Any customers, non-residential or residential, who are having trouble paying their bill should contact us immediately so we can work with them and get them enrolled in one of the many programs we offer."
Gross encouraged anyone with questions to visit Eversource.com/billhelp or call (800) 286-2828. Information on third-party suppliers is available at www.energizect.com. People with specific issues who need help can also contact the state Office of Consumer Counsel at (860) 827-2900.
Beginning in 2020, the state Public Utility Regulatory Authority prohibited third-party electric suppliers from contracting with hardship customers after deciding that most people in this category were overpaying after switching. Some people accused several of the alternative electric suppliers with bait-and-switch tactics that led to initial lower rates suddenly skyrocketing after a few months, leaving many unaware they were overpaying and others unsure of what to do.
Waterford resident Diane Martin was unaware that her daughter Elaine would lose her hardship status by signing up to get lower-cost electricity from an alternative supplier. She had seen Eversource's charges go from 12 cents a kilowatt hour to double that in January, and she initially thought changing suppliers could save her daughter a few dollars on her limited income.
She said no one warned her what was to come. Elaine lost her Eversource Matching Payment Program and other benefits.
"I apply for her 'heat assistance' through the East Lyme Senior Center," Martin said in a text. "I called the center to ask if they were aware when she switched her supplier that she lost the assistance program ... they weren't sure."
Martin had to quickly call Constellation, her alternative supplier, and have them switch her daughter back to Eversource. She said what had been an easy process with Eversource turned into a 70-minute wait with Constellation.
"Most senior centers take applications for these benefits, as does TVCCA," Martin said. "I would hope (regarding possible loss of benefits) they would notify those they assist via email or at the least with a Facebook post."
Koch, the New London resident who went on hardship for the first time this year, said her disabled daughter in the Norwich area, who is also in the program, never warned her of any issues with switching, because the public utility there is city owned, so Eversource wasn't an option. TVCCA didn't warn her either, she said.
TVCCA Executive Director Deb Monahan was not available for comment.
"We work with community action agencies to keep them informed, but unfortunately sometimes there is some misinformation that is shared," Eversource's Gross said in a phone interview.
As for Koch applying again next year for hardship status, she said, "No, I'm not going to be bothered with it."
