Is Customer Choice the Right Choice for Indiana?
Monday, December 30, 2013
INDIANAPOLIS - "Customer choice" may sound like a good thing, but according to some experts, Hoosiers need to be aware of the risks of deregulation. Efforts are underway to develop a new energy plan, and one idea being tossed around is the "customer choice" option, where retail customers choose their own electric supplier. While executive director Kerwin Olson of the Citizens Action Coalition agrees new energy policies are needed, he said basic necessities like home heating must remain affordable.
"As we move forward with this discussion about regulatory reform in the state of Indiana (it is important) that we are mindful of the dangers inherent in deregulation and customer choice programs with respect to costs, especially the impact that deregulation has on the most vulnerable among us: senior citizens, disabled, and folks on fixed incomes."
Olson said that with deregulation it's crucial that proper safeguards are in place to protect consumers. Indiana was once among states with the lowest electric rates in the nation, but now ranks 23rd, up into the top half.
Those in favor of deregulation claim competitive electricity markets keep prices down and provide consumers more options. But according to Tyson Slocum, director of the Public Citizens Energy Program, which advocates for affordable energy policies, it can actually result in higher prices because of hidden fees and deceptive marketing.
"These retail providers often do not advertise well 'balloon payments,' they will market (to) you that you will save money in the first couple of months while failing to mention that rates will increase significantly after that period."
Slocum said that if Indiana decides to move forward with a customer choice option, there have to be clear prohibitions on unscrupulous practices and a consumer bill of rights needs to be written into the contract.
"There has to be rights by the household if they have a complaint with this retail provider to exit that contractual agreement and return to the incumbent utility without facing a penalty," he declared.
The state's current energy blueprint was developed in 2006 and costs have risen since then. The Indiana Office of Energy Development is crafting new energy policy recommendations and will submit them to Governor Mike Pence in June of 2014.
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