Electric Rates to Rise in Connecticut
Sources: AARP, Inside Investigator, Tom Hopkins
Eversource and United Illuminating recently announced the average consumer will see their cost of electricity jump by $84 per month this winter, citing the events in Ukraine as one of the reasons for the steep rise in natural gas prices.
That could lead to natural gas becoming “prohibitively expensive” during an extended period of cold. ISO-NE and the state’s electric companies have also warned of the potential for rolling blackouts in the past due to the region’s limited infrastructure and pipeline capacity.
Editor’s Note: ISO-NE is an independent, non-profit Regional Transmission Organization (RTO), headquartered in Holyoke, Massachusetts, serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
AARP Connecticut has stepped up to the plate to urge the Public Utilities Regulatory Authority (PURA) to deny the proposal by United Illuminating to implement a rate increase that will raise the cost of electricity distribution for Connecticut ratepayers by 15% over three years.
Connecticut has the highest retail electricity price in the continental United States at 19.82 cents per kilowatt-hour, according to 2020 data from the federal Energy Information Administration. The U.S. average is 10.59 cents. Connecticut electricity consumers already are in a challenging position and utility bills are already unaffordable for many UI customers.
In a petition to PURA, AARP states that the rate increase is too large. UI’s application states that the actual change in revenue in year one will be an estimated $54.2 million, producing an average total bill increase of about 4.9% per year for 3 years for all rate classes. This is an estimated monthly bill increase of $10.37 in the first year on the average residential electric bill of $198.80, one of the highest electricity rates in the country.
Additionally, this nearly 5% increase per year for three years will have a compounding effect, raising the average estimated monthly bill to $230.60 by year 3. Additionally, UI states that customers are paying less now than when rates are approved in 2016. While this is true, it is a misleading statement. UI was required to return nearly $45 million to customers in 2021 because it had overcharged customers after the 2017 federal corporate tax cut.
AARP are asking impacted residents to exercise their power by providing comments during any of the public hearings:
PURA will hold public comment hearings through remote access on Tuesday, December 13, 2022, at 12:00 p.m., and on Thursday, December 15, 2022, at 7:00 p.m. Members of the public may register through the web links below to listen to or participate in the following public hearings:
Register: December 13, 2022 12:00 p.m.
Register: December 15, 2022 7:00 p.m.
After registering, you will receive a confirmation email containing information about the public hearing.
New England states like Connecticut and Massachusetts have been turning away from fossil fuels like natural gas to focus their efforts on offshore wind energy in order to become more carbon neutral, but construction of several wind farms off the coast of Massachusetts has not yet been completed.
Despite natural gas burning cleaner than oil or coal, during periods of intense energy usage, generators have to supplement the cleaner-burning natural gas with oil and, occasionally, coal. According to ISO-NE’s resource mix for 2021, oil and coal burning accounted for .7 percent of electricity generation, and oil and coal-fired plants are on their way out.
“Since 2013, roughly 7,000 MW of mostly coal, oil, and nuclear generation have retired or have announced plans for retirement in the coming years,” ISO-NE’s resource mix report said. “Another 5,000 MW of oil and coal, which now run only during peak demand or periods of gas pipeline constraints, are likely to retire soon.”
In October in a unanimous decision by PURA the agency established a two-tiered discount rate for low-income Connecticut residents struggling to afford electricity. PURA ordered that the state’s electric distribution companies offer the discount as soon as possible, but no later than Jan. 1st, 2024.
Households earning less than 60 percent of the state median income — $76,465 for a family of four — will qualify for Tier 1, which offers a 10 percent discount on the customer’s monthly electric bill. Households that earn up to 160 percent of the federal poverty guideline — $44,400 for a family of four — will qualify for the Tier 2 discount of 50 percent.
Customers coded as “financial hardship” with electric distribution companies will be automatically enrolled in Tier 1, as well as customers who receive awards through the Connecticut Energy Assistance Program (CEAP). To receive the Tier 2 discount, customers will have to opt-in.
PURA has mandated that the companies start accepting applications by August 2023 and notify eligible customers.
Through the program, PURA aims to reduce “uncollectibles”, which refers to unpaid electric bills that are socialized across all other electric customers, increasing electric rates for all ratepayers. According to the PURA decision, the actions the agency is taking to make electricity costs more affordable are designed to lessen unpaid bills, as well as the need for service disconnections and reconnections, which will benefit all ratepayers.
PURA intends to reevaluate the program every other year, with the first review expected in 2025.