The Act defines “seller” to include without limitation:
a supplier, wholesaler, distributor or retailer involved in the sale or distribution in [Connecticut] of an energy resource.
It defines “energy resource” to include without limitation:
middle distillate, residual fuel oil, motor gasoline, propane, aviation gasoline and aviation turbine fuel, natural gas, electricity, coal and coal products, wood fuels and any other resource yielding energy.
An independent generator of electricity would presumably fall within the definition of “seller” as a supplier or wholesaler of an “energy source,” i.e. electricity. If so, such a generator that sells electricity at an “unconscionably excessive price” during a period of “abnormal market disruption” or when “an imminent abnormal market disruption is reasonably anticipated” would be subject to the Act’s penalties.
The Act defines “abnormal market disruption” as:
any stress to an energy resource market resulting from weather conditions, acts of nature, failure or shortage of a source of energy, strike, civil disorder, war, national or local emergency, oil spill or other extraordinary averse circumstance.
The Act does not specifically define “unconscionably excessive price” but instead provides that evidence of each of two factors constitutes “prima facie evidence that a price is unconscionably excessive.” The first factor is that there was a “gross disparity” (undefined) between the price in the subject transaction and the price that the seller had charged in the usual course of business “immediately prior to (A) the onset of the abnormal market disruption or (B) any period in which an imminent abnormal market disruption is reasonably anticipated.” The second factor is that “the amount charged by the seller was not attributable to additional costs incurred by the seller in connection with the sale of [the] product.” It is unclear whether an additional increment of profit to maintain the seller’s customary profit margin expressed as a percentage of costs incurred would be “attributable to the additional costs incurred.”
It remains to be seen how the Act would apply to independent generators that sell electricity under longterm contracts. The Act should not affect independent generators that sell electricity under long-term fixed price contracts that were executed prior to the period of an abnormal market disruption or the period when an imminent abnormal market disruption is reasonably anticipated, because the sales price would remain unchanged. But the Act could conceivably apply to independent generators of electricity that operate under long-term contracts with variable pricing where, for example, price escalates with cost to maintain the generator’s profit margin as a percentage of costs incurred.