By Marc E. Fitch, Inside Investigator
Editor’s Note: This is a guest editorial from Inside Investigator
It seems everybody in Connecticut loves to hate their electric company, especially after the latest two rounds of rate increases. But the question is, should they?
Eversource, Connecticut’s largest electric distribution company and United Illuminating are privately owned companies, beholden to shareholders, but they are also regulated companies – they have to work hand in hand with the government. They cannot just raise rates; they must get permission to do so.
So, when the Public Utility Regulatory Authority (PURA) approved a massive rate increase in July of 2024, amounting to roughly $48 more per month for the average Eversource residential customer, people were understandably angry at their electric provider; but more and more, they were also pointing the finger at Connecticut lawmakers who, in turn, began pointing the finger at each other.
That’s because residents’ higher electric bills were not due to the cost of natural gas, or oil, but rather because of the public benefits charge on their bill.
The public benefits charge is the cost imposed on the utility company to implement policies and programs passed by the General Assembly. Essentially, lawmakers pass a bill or approve a program that requires the utility company to spend money implementing that policy or program. Since these are expenses imposed on the utility by the government, the government allows the utility to recoup their losses with an additional charge to ratepayers levied as a percentage of their overall electricity spending.
It essentially acts as a hidden cost that lawmakers could – until fairly recently – impose on the public who would, in turn, get angry at the utility company instead of their elected politician. However, when PURA approved the rate increase to the public benefits portion of ratepayers’ electric bills in July, the utility companies made it clear the costs were so high due to state regulators and lawmakers. The public took notice; in this case, there were few people to get mad at other than politicians.
Connecticut’s sky-high electric rates are nothing new; Connecticut has been in at least the top five states in the continental United States for the cost of electricity for a long time, but the latest rate increase for public benefits, which had been allowed to build up over the course of two years, appears to be a watershed moment; there is outrage all around.
Angry ratepayers took to social media posting their bills; there were calls to boycott the public benefits charge; a petition gained tens of thousands of signatures to stop the public benefits charge altogether, and the governor and lawmakers held meetings.
The drastic increase was due to a combination of factors: PURA had put off the utilities’ rate increase request in 2023, meaning that 2024’s rate would encompass two years’ worth of costs, plus interest; secondly, PURA approved a shortened timeframe for collection, meaning public benefit charges would be higher, but collection would last a shorter amount of time.
Roughly 77 percent of the nearly $737 million owed to Eversource and UI stemmed from a power purchase agreement with Millstone Nuclear Power Plant, that can be traced back to an executive order issued by Gov. Dannel Malloy and a 2017 bill passed during a special session with the full support of Republicans – who at the time had control of half the Senate and nearly half the House – and some Democrats.
In 2017, Dominion Energy was threatening to shut down the nuclear power plant that supplies 37 percent of the Northeast’s energy supply – clean energy at that – plus over a thousand well-paying jobs in Connecticut. Dominion no longer wanted to compete with natural gas on the energy market and instead wanted a guaranteed return through a power purchase agreement, which mandates the amount of energy Connecticut’s utility companies purchase from them at a set rate — in this case roughly 5 cents per kilowatt hour.
The legislation that ultimately passed, however, required the Department of Energy and Environmental Protection (DEEP) and PURA to conduct an appraisal of Millstone’s situation and determine “whether to conduct a solicitation and procurement for nuclear power,” according to the Office of Legislative Research.
Officials from those two agencies issued a report saying it was better to contract with Millstone than risk nearly 40 percent of the region’s energy. The legislature in 2018 could have rejected DEEP and PURA’s report, but instead they “took no action and the results were thus deemed approved.” DEEP secured a 10-year contract in 2019.
That power purchase agreement with Millstone can help or hurt. Natural gas, which supplies most of the Northeast’s energy demands, can fluctuate wildly depending on market conditions. During those times of rising natural gas prices, the power from nuclear stays the same, lowering the overall supply cost for ratepayers.
Over the course of 2022 and part of 2023, the Millstone PPA saved ratepayers roughly $300 million, first by zeroing out some public benefit charges ratepayers would have paid, and secondly through a reduction on the public benefits charge, as the War in Ukraine caused a spike in fossil fuel energy prices.
Typically, however, natural gas is cheaper, and that Millstone agreement has the opposite effect; it increases the price. That is part of what happened in July of 2024; natural gas prices went back down, but the utilities still had to pay the Millstone rate.
Most of the remaining cost was for a COVID-era shutoff moratorium that, while understandable when people were forced out of their jobs by the government during the pandemic, had been extended until May 2024 by PURA, well beyond when everyone went back to work and school.
Eversource saddled much of the blame on PURA for putting off last year’s request; Republicans held press conferences calling for a special session to use American Rescue Plan dollars to pay off the bill and blaming Democrats for not taking action, while Democrats, in turn, blamed Republicans for the Millstone agreement.
For all the finger pointing, however, ultimately it was DEEP and PURA who brokered the deal with Millstone. They thought it was a good idea then, and apparently still do.
“DEEP and PURA conducted a joint assessment of the Millstone nuclear generating facility, reviewed the facility’s financials, and determined that the facility was at risk of retirement given projected low energy market revenues and plant operating costs,” DEEP Commissioner Katie Dykes wrote in legislative testimony in 2023, which also notes ratepayers’ savings from the deal. “By preventing the Millstone retirement, Connecticut saved the region from significant negative impacts on the region’s electric grid with respect to fuel diversity, energy security, and grid reliability; avoided an estimated $1.8 billion (in 2017 dollars) in replacement costs that would have been borne by Connecticut ratepayers and prevented regional carbon emissions from increasing by 20 percent.”
But the public anger generated over Connecticut’s electricity costs may have reached a tipping point in which lawmakers will have to more carefully consider future policies if it means passing on more costs to consumers; they’d largely had free reign for decades as the public benefits charge was wrapped into the delivery charge, hidden from the public, making the utility company part tax collector, part punching bag.
The eye-popping public benefits rate increase this year, however, caused the public to sit up and take notice. Although this particular rate increase was unusual, Connecticut rate payers have been subsidizing government programs and policies through their electric bill for more than twenty years and, when those payments are accounted for, the total figure is staggering.
Between 2004 and 2024, Connecticut families have contributed roughly $7 billion to government programs and policies through their electric payments – and that is likely a conservative estimate.
That $7 billion could be a good thing or a bad thing, depending on your point of view, but, at the very least, the public should know how much they’ve paid, what it goes toward, and what they may possibly have to pay in the future. Below is a breakdown of your public benefits charges including a breakdown of how we reached the $7 billion figure.
The Public Benefits portion of your electric bill is broken into two parts: the combined public benefits charge (CPBC) and the Non-Bypassable Federally Mandated Congestion Charge (NBFMCC). To use the latest round of rate increases as an example, the cost of people not paying their bills fell under the CPBC, while the contract with Millstone fell under the NBFMCC. They both get wrapped into the public benefits charge and then get wrapped into your bill.
As the name implies, the CPBC is a combination of three charges: the system benefits charge, the renewable energy investment charge, and the conservation adjustment mechanism. They sound more complicated than they really are, but all of them are an additional charge on your energy usage that goes to fund particular public programs and governmental entities.
Upset that you’re paying for people who aren’t paying their bills? You’ve been paying for that since at least 2000 under state statute that mandated the systems benefit charge. That charge covers “public education, hardship programs, and other societal costs,” according to the Office of Consumer Counsel.
To give some context to the costs, in 2012, Eversource spent $32.1 million on hardship protections for customers and another $4.6 million on matching payment programs to help customers reduce the money they owed, according to a report by the OLR. Those figures for UI were $7.3 and $4.5 million, respectively. That was all funded through the charge on your bill, and the amounts change depending on the costs incurred by the utility company in a given time frame.
What doesn’t change, however, is ratepayers’ subsidization of the Connecticut Green Bank. The renewable energy investment charge is an extra one mill per kilowatt hour that is tacked onto your bill that goes to the Clean Energy Fund, which is administered by the Green Bank. The money is then used to support solar projects throughout the state – residential, commercial, and municipal. The charge on your bill dates back to 2004 when the money would go into the Clean Energy Fund; the Green Bank was not formed until 2014.
According to the Green Bank’s latest financial report, that small charge brought in $25 million and $24 million in 2022 and 2023 respectively. Ten years ago, that figure was $27 million, so while there is some fluctuation it remains a relatively stable revenue source that you’re paying for both through the public benefits charge.
The utility companies have to purchase the power generated by those solar systems — whether they’re on your roof or covering an entire field – the cost of which is covered through the NFBMCC charge on your bill. So, in a way, you’re paying twice – once to fund the Green Bank and then again to purchase the solar energy.
Additionally, the Green Bank, a quasi-public entity, receives funding through the Regional Greenhouse Gas Initiative (RGGI) – a cap and trade auction system for electric energy producers to bid on carbon credits. It’s meant to lower carbon dioxide emissions by requiring producers to purchase carbon credits at auction, sending hundreds of millions to participating states, but “may indirectly impact a customer’s bill,” according to a 2020 OLR report.
The third and final part of the CPB charge is the conservation and load management (C&LM) charge and the conservation adjustment mechanism (CAM), which is three mills per kilowatt hour on your bill, with the ability to leverage an additional three mills if necessary. The charge, which regularly brings in $16o million per year from ratepayers according to the OCC, funds energy efficiency programs, most notably, Home Energy Solutions (HES).
HES is administered by the utility company and involves technicians coming to your home to do an energy assessment, find potential efficiencies, and address efficiency shortcomings, with the ability to receive discounts and rebates on further services. The service is not free but is supposedly deeply discounted with a $75 base charge, but HES also offers payment programs for hardship customers.
So, for just those three components making up the CPB charge, ratepayers are subsidizing state government programs and policies to the tune of roughly $236 million per year – and that’s just counting the hardship customers and payment programs, payments to the Green Bank, and the energy efficiency programs.
But there is also the NBMCC, which is how the Millstone contract is paid for and, in the future, how the energy from the Revolution Wind project will be paid for (more on that later). Most, but not all, of the NBMCC costs are due to policies passed by the Connecticut legislature; roughly 12 percent are due to charges imposed on the utility company by ISO-New England.
According to a 2020 OLR report that broke down the $290 million in NBMCC charges for Eversource by policy, the Millstone procurement was the most costly single policy at $74 million that year. However, most costs were related to renewable energy programs.
Low and zero renewable energy credits, ownership of renewable energy projects, and administrative costs amounted to $43 million, stemming from 2011 legislation creating DEEP and giving the agency it’s marching orders for Connecticut’s energy future. The bill, like the 2017 Millstone bill, passed under emergency certification, and received a unanimous vote in the Senate and only eight negative votes in the House.
Another piece of legislation from 2005, that requires utility companies to purchase power from particular energy producers, also passed under emergency certification and accounted for another $50 million in public benefit costs.
In total, OLR estimated that in 2020, Eversource ratepayers paid a total of $255.3 million in NBFMCC charges linked directly to policies passed by lawmakers. The report also linked to a filing by UI showing their NBFMCC costs for 2019 as $41.9 million with OLR estimating that 91 percent, or $37.4 million was public policy.
Total it all up and Connecticut ratepayers can be expected to pay $528.7 million in a given year through their electric bill for policy decisions and programs implemented by lawmakers. The costs and charges, however, rise or decrease year to year. In 2020, that meant an extra $22.45 per month on your Eversource bill. This year, it’s an extra $48.
Given the fact that some of the programs and policies attached to the combined public benefits charge come and go – and the fact that for a couple years the Millstone contract actually saved money for ratepayers – we cannot assume that every year ratepayers put up more than $500 million in public benefit payments. But there are other figures that we were able to confirm with some Eversource insiders.
In July, Eversource did a twenty-year lookback, separating out the public benefits charges and other charges on your electric bill to show the costs of each charge for the average residential ratepayer over time.
What it shows, using some rough calculations, is that since 2004 the average residential Eversource customer has paid roughly $4,778.80 in public benefits charges. There are 1.16 million residential Eversource customers, putting the total cost at $5.5 billion over twenty years. This is only Eversource residential customers, it does not include businesses, which can pay a substantial amount due to their energy usage.
While we don’t have recent numbers for UI customers, the company did offer a breakdown of its public benefits costs between 2004 and 2019 as part of their docket information to PURA. What it showed was that UI customers paid $579.9 million in NBFMCC charges, and $800.1 million in CPB charges, bringing the total to $1.38 billion – and that was five years ago. In July, PURA approved UI’s rate increases on the public benefits charge to recover $84.5 million.
That puts UI’s total public benefits component up to $1.46 billion. Combined with the estimated $5.5 billion for Eversource’s average residential customer we arrive at roughly $7 billion in total costs. It is a figure that is probably low.
The policies and programs included in the public benefits charge have built up over the years, so, we asked Eversource to compile the most significant drivers of rate increases over the last twenty years. Since 2019, much of that was based on the Millstone contract and the COVID shutoff moratorium that was extended several times, which has already been covered in this piece and by many other publications. But two other years stand out: 2005 and 2016.
“The System Benefit Charge has been around for this whole period we’re talking about,” said Eversource Director of Rates Ed Davis. “We’ve always had a level of hardship uncollectibles, but there have been other programs, like matching payment programs and funding, and then we’ve had the more recent ones.”
“Then we’ve had some more unique things like the moratorium, and the level of costs that maybe weren’t recovered during a period and then they built up, and that’s what’s recently happened,” Davis continued. “There’s so many details and components here.”
Some of those components, as indicated before, date back to 2005, one of the dates that Eversource says was a significant change to public benefits charges (which were not called public benefits charges back then, but were just wrapped into the delivery bill). One of the key points in 2005, was a $162 million increase due to “capacity” issues; in other words, actually producing the energy needed.
Connecticut was facing a lot of “congestion” in its electric grid at that time, meaning they couldn’t get enough power off the regional grid to reach certain areas, most notably the Fairfield County area. This required contracts with energy producers who would be able to fire up generators when the additional juice was needed. That meant a public benefits charge increase of $12.73 in the first half of the year and $22.76 in the second half of the year.
“We needed to make available capacity to reliably meet our load in these areas. At the time you’re bringing in all these contracts for capacity and generation to meet that,” Davis said. “And then we incentivized generation.”
Some of those programs and contracts born out of 2005 eventually ended, but many continued for more than a decade. The “contracts for differences” listed in the 2020 OLR report points back to the emergency legislation in 2005. That particular policy — quite necessary if you wanted to keep the lights on at the time — is still generating costs under the public benefits charge. In 2016 – the other significant date pointed to by Eversource – contracts for differences accounted for $14 million of the $142 million increase in 2016, which translated to a $15.87 public benefits charge to Eversource ratepayers.
2016, however, was when Connecticut really started building up and investing in its renewable portfolio.
“It’s sort of the beginning of the growing wave, which continues, to put in place renewable resources and more distributed resources,” Davis said. “So, you had contracts for different projects in that vein but now we’re also getting into the development of different tariffs, where we start to get more net-metering, and then we got into large solar arrays. So, you see a whole sort of development that has been growing particularly take hold in the 2015 time frame and continues to this day.”
2016 saw a laundry list of cost increases: revenue credits decreased by $36 million; energy efficiency costs (C&LM) increased by $17 million; hardship uncollectible costs increased $9 million; solar and other low emission energy costs increased $4 million; Project 150 Class 1 renewable costs increased $8 million. It all added up on top of other preexisting charges to the public benefits rate. There are a lot of moving parts on top of the constant charges like the hardship costs, energy efficiency, and the Green Bank charge.
It wasn’t that there was any specific policy in 2015 or 2016 that increased those costs, but rather multiple policies and programs that had built up over the years; sometimes it can take time in the world of energy and energy infrastructure for the true cost to be known and felt. Connecticut, throughout the 2010s and into the 2020s, pushed for more renewable and clean energy – that was, and is, considered one of the benefits of the Millstone contract, according to DEEP; massive amounts of energy for little to no emissions.
It is also behind the push for solar power through the subsidization of rooftop solar for residential homes, commercial businesses, and solar arrays, but it all comes at a cost.
“The trend has been toward renewable resources and clean energy. At the end of the day, that has been the more recent set of costs that have emerged,” Davis said. “There’s a cost to this driven by public policy, through statute, through regulation, through tariffs, and through customers actually participating, and it has grown. Yes, it has opened up a whole market of lots of solar developers and providers, but that has been part of these costs that go through these rate mechanisms. All part of public benefits in the bigger picture.”
Despite the outrage generated by the latest round of rate increases, the history of the public benefits charge is relatively small: even including the massive 2024 rate increase, the public benefits charge between 2004 and 2024 averaged only $16.58 per month for an average Eversource residential ratepayer.
In 2005, the public benefits charge was $12.73; in January 2024, it was $12.43. The cost fluctuates every six months, but prior to July of 2024, the most it had ever gone up to was $32.56 in 2020. Is it a hidden cost that has funneled $7 billion into government programs and policies for decades? Yes. Is it the biggest hit to your wallet in a state with some of the highest electric rates in the country? No.
The public benefits charge is important to highlight because it has long been a workaround for state legislators to fund policies, and it should be out in the open; but it also pales in comparison to the biggest policy choice of all: Connecticut’s energy supply.
According to the same 20-year numbers provided by Eversource, the cost of energy supply has fluctuated wildly, but overall has steadily increased. From whom, what, and where we get our energy is the most impactful policy choice of all, and Connecticut has recently changed its mind.
Ten years ago, during Gov. Dannel Malloy’s administration, the big energy push in Connecticut was for more natural gas. The state embarked on a plan to shift home heating from oil to natural gas because natural gas burns cleaner and cheaper, particularly as the United States began to produce more and more through fracking. PURA approved a plan by energy companies to convert nearly 300,000 homes and businesses in Connecticut to natural gas over a ten-year period.
Connecticut’s use of natural gas expanded rapidly over the next ten years, according to the U.S. Energy Information Administration (EIA). Between 2012 and 2022, electricity generation from natural gas increased from 16,500 megawatts to 22,500 megawatts as nearly 1,400 natural gas generators came online.
Of course, that required bringing more natural gas into the state via pipelines, which would not only feed the Northeast region with energy for electricity but also meet the increased demand for natural gas as Connecticut pushed more people to switch from oil heating to gas.
None of it worked out, however. Kinder Morgan’s pipeline expansion plans ended in 2016, killed off by a combination of environmental groups concerned the region would become too reliant on fossil fuels contributing to climate change; opposition from state leaders; wild swings in the price of natural gas, and a lack of commitment by energy distribution companies.
The Malloy administration had also embarked on pipeline expansions, hoping to build 900 miles of gas lines to businesses that use large amounts of energy, with ratepayers footing $64 million “in higher costs for the expansion program,” according to the Hartford Courant. None of that really worked out either. By the time Gov. Ned Lamont took office in 2018, the energy conversation had shifted from all gas, to all electric. In 2022, PURA announced that it would end the state’s expansion of natural gas, “concluding that the program is not in the best interest of families and businesses and does not further the state’s climate and energy goals,” according to the Conservation Law Foundation.
Under the Malloy administration, Connecticut had already planted the seeds for the shift, particularly through investing in solar. The Lamont administration sees the future as electric, mirroring energy policies under President Joe Biden, and pushing for electric heat pumps to be installed on residential buildings and businesses through subsidies; rebuilding the State Pier to support offshore wind construction to feed Connecticut’s electricity needs, and, of course, electric vehicles.
But shifting a state and region’s energy infrastructure can be arduous and expensive. Gov. Lamont and Democrats in the General Assembly faced enormous pushback when California moved to eliminate the sale of new gasoline powered cars by 2035, replacing them with EVs. Under state statute, Connecticut was obliged to follow California’s emissions standards, but public opposition and, perhaps, the realization that this might be a bigger infrastructure project than the state could reasonably embark upon, led to that regulation being pulled from consideration.
During public testimony, Eversource Vice President of System Planning Digaunto Chatterjee, estimated it would cost between $1.5 and $2.4 billion to build out the grid to sustain an additional 4,000 megawatt draw on top of Connecticut’s 8,000 megawatt usage during peak demand – a cost that would have been paid for by ratepayers.
Part of the problem, however, is that the administration has never really said where all the extra electricity would come from. And it’s not just Connecticut; several New England states, including Massachusetts, are all making the leap to more electricity, increasing demand without, thus far, increasing supply – and whatever supply they do get, they want it to be clean and renewable. Unfortunately, that comes at a cost, one borne by ratepayers and taxpayers.
According to ISO-New England, electric vehicles and electric heating in New England will lead to a 17 percent rise in energy use by 2033 and could require roughly $1 billion in transmission investments to the grid through 2050 “to support the clean energy transition.” Attempts to bring more non-fossil fuel power into the region have been difficult, but some are at least getting off the ground.
In 2015, Eversource sought to bring Canadian hydropower to the New England grid via a $1.6 billion, 192-mile transmission line from Canada through New Hampshire. The project, funded by shareholders, was called the Northern Pass, and was supposed to bring emission free energy to the region. The project, however, was met with opposition from “a determined collection of town officials, environmentalists and residents,” according to the Concord Monitor, and ultimately the plan was scrapped after Eversource lost hundreds of millions.
Another Canadian hydro project, backed by Massachusetts ratepayers, aims to bring Canadian hydro power to the New England grid via Maine. The project under a company owned by UI parent company Avangrid, is expected to deliver 1,200 megawatts of hydro power to the grid. The measure went to referendum for approval by voters with opposition stemming from environmental groups and others who were, perhaps unknowingly, being funded by NextEra Energy, which owns the Seabrook nuclear power plant, in a fascinating political drama uncovered by Maine Public, and which resulted in ethics fines.
The New England Clean Energy Connect project, as it is known, was ultimately approved by Maine voters and is currently being built.
For its part, Connecticut has embarked on a project to update the State Pier and turn it into a hub for offshore wind energy, with three wind farms already slated for construction off the waters of Rhode Island and Massachusetts, most notably Revolution Wind, which is projected to bring 304 megawatts of electricity to Connecticut when it is up and running. But it isn’t cheap.
Revolution Wind was originally a joint project between Eversource and Danish company Ørsted. Connecticut taxpayers have had to foot the bill for redevelopment of the State Pier, which jumped in price from $93 million to more than $350 million in just a few years, and has been rife with ethics violations, contractual issues, and litigation. Eversource eventually unloaded its stake in Revolution Wind for a loss.
And while taxpayers have foot the State Pier bill already, when the turbines start spinning, it could increase the charge to that public benefits section of Connecticut’s electric bills. Like the Millstone nuclear plant, Revolution Wind will operate under a power purchase agreement, requiring utility companies to purchase a certain amount of energy at a particular price.
While a power purchase agreement can act as a hedge against fluctuating natural gas prices, it might be a different story for Revolution Wind because the cost per kilowatt hour is much higher than that of the Millstone contract.
According to Eversource’s 2023 annual report, Connecticut would pay between $98.43 and $99.50 per megawatt hour for Revolution Wind electricity. For comparison, the Millstone contract, which received much of the blame for the spike in the public benefits charge, is $49.99 per megawatt hour.
Revolution Wind will obviously supply much less power than Millstone, lessening the overall effect on the public benefits charge, but there will be a cost. Connecticut lawmakers have determined the state’s energy future will be clean and renewable but upgrading and changing an entire state and region’s energy supply and infrastructure that has been built up over a century, will take time and a lot of money.
“People don’t always understand these things until something stands out,” Davis said. “When you have a rate change at the time when usage is higher and you look at your bill, it gets attention. Just talking it through and explaining it so people understand it; that’s half the battle, I think.”
If people didn’t understand it before, they’re certainly starting to, and that involves understanding that the public benefits charge is nothing new; Connecticut ratepayers have contributed more than $7 billion toward these government programs, policies, and mandates over the last twenty years through a hidden tax that is not-so-hidden anymore.
“The programs within public benefits are programs we support. They are of critical value to customers. They also support the state’s clean energy goals,” said Jaimie Ratliff, media relations for Eversource. “The reason for the incredible increase starting July 1 was from regulatory positions more than a year ago to push forward the costs for these state mandated programs, which is why it’s the largest increase ever within the public benefits portion of the bill.”
To add a bit of insult to injury, just two months after increasing the public benefits portion of the bill to make up for the Millstone contract and the COVID shut-off moratorium, PURA approved another increase to the public benefits charge – subsidies for both private and public installation of electric vehicle chargers under a program that PURA itself had established. Much of those ratepayer funded rebates went to some of Connecticut’s wealthier towns.
In late August, Connecticut Republicans held a press conference, announcing a petition for a special session to potentially alleviate some of the public benefits pain by using remaining American Rescue Plan dollars to pay off a portion of the cost, but they also had a few other ideas – namely paying for the public benefits out of the General Fund like most other state programs and policies, rather than having it come out of ratepayers pockets with their electricity bills.
You’d still be paying, just in a different way. Whether Connecticut can actually find room in the budget for such an added expense is a different story.
Republicans also made another proposal: limiting power purchase agreements to 150 percent above competitive power markets, which would mainly be natural gas. Such a law would likely send Ørsted running back across the ocean and taking its wind turbines with them. Companies that build wind farms need a return on their investment and that comes in the form of power purchase agreements, which give them guaranteed income.
Gov. Lamont finally responded to Republicans’ requests for a meeting on electric rates, writing in a letter that Connecticut’s spiking public benefits costs are due to decades’ worth of public policies and a lack of supply.
“We are at the end of the pipeline, leading to higher supply costs,” Lamont wrote. “This makes even valuable legislatively authorized programs that increase supply and improve grid reliability, like the Millstone contract and electric vehicle charging incentives, more difficult for ratepayers to afford.”
That is true: Connecticut is at the end of the pipeline and has thus far rejected any expansions to that pipeline to bring in more natural gas; has been stymied on bringing in hydro power from Canada; is operating under 10-year contract with Millstone and is facing potentially very high contracts for wind power.
The Lamont administration wants Connecticut to be more reliant on electricity, whether through heat pumps or electric vehicles, and they want that electricity to be clean and renewable. But if Connecticut has a long-term plan for generating more supply to create that electricity at a lower cost, it has yet to materialize.
This isn’t to let the utility companies off the hook. That same twenty-year lookback from Eversource shows that the delivery charges – Eversource’s bread and butter – are often just as high as supply costs; you can certainly be mad at them for that.
But two portions of your bill are dictated by decisions made in Connecticut’s capitol by elected leaders and bureaucrats. Now that the public has a better understanding of this fact following the July rate increase, lawmakers may be feeling a bit more pressure. They can’t hide behind the utilities anymore.
