By Barbara Heimlich
Editor
Sources: Marc E. Fitch, Senior Investigative Reporter, CT Insider; Chris Dehnel,
Patch Staff; Jordan Nathaniel Fenster, Hearst staff writer; Mark Prokop. Newsletter producer
United Illuminating (a subsidiary of Avangrid Inc.) has filed its preliminary 2025 Rate Adjustment Mechanism (RAM), with the Public Utilities Regulatory Authority (PURA). In the filing, UI calculates that beginning in May of 2025, customers will see a 0.10 percent overall bill increase (1/10 of 1 percent). That equates to approximately 26 cents per month for the average residential customer using 700 kilowatt-hours per month, primarily due to the Public Benefits Charge. The charge is made up of impositions from the legislature or regulators and represent “a pass-through cost for UI that the company does not profit from,” officials said.
“The increase belies claims from some state legislators that the 2024 increase would end by May 2025,” UI stated in a news release. “It’s important for our customers to know that, as a distribution-only company, we do not control or profit from the Public Benefits Charge, which funds sustainability and hardship programs that have been passed by state policymakers,” UI President and CEO Frank Reynolds said. “We are required by state law to implement the programs contained in the Public Benefits Charge. If customers have questions about these charges, we encourage them to contact their elected officials.”
The increase in the Public Benefits Charge is primarily driven by an $18.1 million increase in the System Benefit Charge, which pays for energy assistance costs, energy efficiency programs, and other state-mandated programs, UI officials said. The most “significant driver” of the SBC increase is arrearage forgiveness programs, including uncollectible billing, bill forgiveness, and the Low-Income Discount Rate, which had its first full year of implementation in 2024, UI officials said.
A secondary driver of the increase is a $12 million increase in the Non-Bypassable Federally Mandated Congestion Charges, which pay for a variety of programs including contracts with zero-emission energy facilities such as the Millstone and Seabrook nuclear power plant contracts, they added.
The final component of the RAM filing is a $43,000 increase to the cost of transmission for UI customers and an adjustment to the Revenue Decoupling Mechanism.
The Public Benefits Charge portion of a residential electric bill pays for programs that state legislators, regulators, and other state policymakers have passed and implemented, and that are required to be paid for on electric bills.
“UI does not control or profit from these charges,” utility officials said. UI’s service territory includes 17 Connecticut towns and cities in an area totaling 335 square miles along or near the shoreline of Long Island Sound.
Energy officials made a preliminary 2025 Rate Adjustment Mechanism filing this week with state utility regulators, the first step toward implementing a new public benefits charge in late May that could affect ratepayer bills.
The filing made to PURA contains some good news — average Eversource residential customer will see their bills decrease by $4 a month from where it is now, according to Tricia Modifca, a company spokeswoman. Modifica said the average residential customer uses 700 kilowatt hours of electricity a month.
“It’s important to note this is a preliminary number that is subject to change,” she said. “This is a regularly scheduled, annual rate adjustment and there will be multiple filings and hearings which is a standard part of this process.”
The company, which also serves communities in eastern Massachusetts and New Hampshire, has its Connecticut headquarters in Hartford.
Today we’ve got more on the battle over utility regulation, amid the news that United Illuminating is asking the Public Utilities Regulatory Authority for a rate increase. PURA’s leader Marissa Gillett has been facing what Charles Rothenberger, director of government relations for Save The Sound, called a “public relations smear campaign.”
“I find it profoundly disappointing that for nearly two years the utilities have waged a PR offensive against Chair Gillett’s leadership of PURA,” he said. “The fact of the matter is that for the first time in a long time, PURA is actually holding the utilities accountable.”
Gov. Ned Lamont has been complimentary of Gillett’s work, saying he hopes “the legislature supports her. She’s holding Eversource accountable,” Lamont said. “I think that’s what you want from your commissioner, working in tandem with her fellow commissioners. I appreciate that Eversource and UI think she’s holding them too accountable.”
Jamie Ratliff, an Eversource spokeswoman, said the reason for the proposed decrease called for in the company’s filing with PURA is that the cost of the elements that make up the public benefits portion of customer bills is decreasing. Those elements include state-mandated power purchase agreements and payments assistance programs for low-income customers.
Other components of the public benefits charge include costs associated with energy efficiency programs, the purchase of renewable energy and nuclear power, as well as funding incentives for solar energy and electric vehicles.
The state’s other legacy electric distribution utility, The United Illuminating Co., made its RAM filing on Tuesday. Officials with the Orange-based company have said the average UI customer will see the public benefits charge portion of their bills increase by 26 cents a month, a 0.10% increase over what customers pay now.
And let’s not overlook the U.S. Government’s Tariff restrictions on our neighbor and ally Canada:
Ontario Premier Doug Ford said Monday that he would shut off electricity that flows south to the United States, in response to threatened tariffs imposed by President. “They rely on our energy, they need to feel the pain. They want to come at us hard, we’re going to come back twice as hard,” Ford said Monday, according to reporting in the Toronto Sun.
If that happens, it could have widespread impacts on the cost of electricity in Connecticut, as well as the ability of the United States and Connecticut to compete on the international market, experts say.
According to a White House fact sheet, the tariffs are needed to combat “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl [that] constitutes a national emergency under the International Emergency Economic Powers Act.
Trump’s 25% tariffs on imports from Canada and Mexico took effect Tuesday, with a 10% tariff proposed on electricity imports from Canada. However, if those tariffs can apply to electricity and who would collect them is an open question.
But regardless of tariffs on electricity itself, if Ford or another Canadian leader could and does turn off the switch providing electricity to Connecticut and the Northeast, it could have far-reaching implications.
About 9% of New England’s energy last year came from sources outside the region, specifically New York and Canada, according to Mary Cate Colapietro, senior communications specialist for ISO New England, which manages the region’s power grid and wholesale electricity market.
Of that 9%, more than half, or 5% came from Canada, though not from Ontario where Ford serves as premier.
“New England’s power system is operating reliably, and ISO New England is administering the region’s wholesale energy markets in accordance with our federally-approved rules,” Colapietro said. “This is a complex situation with many moving parts, and the ISO is committed to maintaining ongoing dialogue with our stakeholders, state officials and the federal government.”
Should Canada turn off power flowing to New England, 5% could be made up elsewhere. One option would be importing natural gas from a neighboring Canadian province, New Brunswick. Though that, too, “would probably be subject to the tariff.”
“There are a lot of plants that run continually. They are referred to as base load plants. Most of them are dual fuel plants, meaning that when there’s not enough natural gas, they can run on oil. Then you have all these other plants that are paid to sit around and run when you need them. They’re the peaker plants. I think that what happens if you lose a lot of the power out of Canada, or if you lose all of the power out of Canada, then those peaker plants begin to be required to run more frequently or constantly, which would be the worst thing, because those tend to be the oldest and least efficient plants.” State Senator Norm Needleman, (D) Essex.
“You have power plants that are being paid money just to be available,” Needleman continued. “I would think that if you lose 4,000 megawatts, or whatever comes in from Canada, suddenly all those plants become more critical.”
If that happened, the price of electricity would likely increase, ultimately for consumers, according to Mohammad Elahee, professor of international business at Quinnipiac University.
The hydroelectric power that is imported from Canada is less expensive than electricity generated by other means, and with less lower-cost electricity being generated, the supply constraint would drive prices up.
“If we have lower imports from Canada, there will be pressure on other forms of electricity,” Elahee said. “We actually buy a lot of hydroelectric power from Quebec. They have water resources. They can make the hydroelectric power cheaper than the USA. That’s why we are buying from them. We cannot just start a hydro-power plant, let’s say somewhere on the Connecticut River. It’s not possible. There is a reason why we are buying from them. They have surplus capacity. Because they have surplus capacity, they’re producing more and exporting it.”
Even if the power from Canada stays on, if electricity tariffs are enacted and the price of electricity increases, the result would be an increase in the cost of doing business for local manufacturing.
“Our manufacturing products, they will also cost more to produce, to manufacture, because of higher electricity costs, so their price will go up,” Elahee said. “Some of the finished goods that we export to other countries will become less competitive, because electricity is used everywhere. It’s not just electricity. It will have a lot of multiplier effects.”
The end result, according to Elahee, will be fewer jobs. If the cost of electricity increases, the cost of manufactured goods would increase commensurately, making domestic companies less competitive.
“Why are we importing from a foreign country in the first place? We are importing because our domestic production cost is too high,” he said. “The labor-intensive part that is often outsourced goes to other countries. If we try to make everything in the USA, they will be so expensive, none of us will be able to afford that, and we’ll end up buying more foreign goods.”
When those downstream effects would happen is uncertain. Elahee said electricity is a “highly regulated market,” with mandated public hearings and due process.
“Maybe it will take another five, six months. Let’s say UI gets part of its electricity from Canada, and if they raise the price immediately, my electricity bill will not go up. Maybe the company will absorb the cost initially, but then eventually it will pass it on to me,” he said. “But there are also other products which are not that regulated, the price will go up immediately.”
