The Middletown Press (Middletown, CT)
What’s driving up Conn. electric rates?
Eversource and UI customers are seeing increases of 12-19%
Whether due to natural gas supplies, the rates charged by your local nuclear power plant, or perhaps a neighbor having skipped paying their electric bill for months on end, your own electric bill is expected to go up this year.
Both Eversource and United Illuminating issued filings earlier this month, stating they would need to increase charges for customers as the companies look to collect on various policy change-related expenses. The companies have faced pushback from elected leaders and other state officials who argue the proposed increases are too much for consumers to take on.
Here is a look at why the bills are expected to go up and what state and energy leaders are looking to do to potentially slow the increase.
How much are Connecticut electric bills going up?
The rates would vary by household for those on standard service agreements with Eversource or United Illuminating. Eversource residential customers would pay an extra $38 a month, or 5.4 centers more per kilowatthour for the average household bill. That would represent a 19 percent increase in cost.
United Illuminating is proposing a 12 percent increase, or an jump of about $26 for the average residential customer.
Why is the change happening?
As the case in other states, Eversource and United Illuminating seek periodic approval for rate adjustment mechanisms to rates that have been approved previously by the Connecticut Public Utilities Regulatory Authority.
Electricity costs are itemized on bills by the cost of procuring electricity the utilities pass on to customers; “public benefits” costs mandated by the state to support a range of programs; charges to transmit electricity from power stations to local substations; and distribution of that electricity to local homes and businesses. Utilities profit from power transmission and distribution only.
Requests for periodic rate adjustments are intended to cover the cost of policies and programs enacted by Connecticut lawmakers, according to Ted Novicki, regulatory affairs director for United Illuminating based in Orange, to include covering the cost of electricity from Dominion Energy’s Millstone Power Station nuclear plant in Waterford.
“At times, that cost is
better than the market is; at other times it's not as good as the market is,” Novicki said. “Important to note that on all of these (rate adjustment mechanisms) filings — none of the money goes to UI or Eversource's bottom line. It is just paying for these programs and contracts that our legislature has come up with.”
Are there other factors driving up the bill?
Another major chunk of the money would reimburse Eversource and UI for past bills they were never able to collect from customers who stopped paying during a moratorium on service terminations during the COVID-19 pandemic. At the time, the moratorium was put in place as a safety net for people who saw their income diminished or eliminated during mass closures of hospitality businesses and others, with the goal of helping them stave off extreme financial duress.
“That's mostly driven by the fact that last year electricity prices were high, making it hard for especially our most vulnerable customers to pay their bills,” said Doug Horton, vice president of distribution rates and regulatory requirements for Eversource.
“The majority of times when we are able to send that notice, that's what prompts the customer to engage with us, to find ways to get onto a payment plan and to actually pay those bills. We have not been able to do that for the last four years since COVID began.”
Late last year, a new Low Income Discount Rate program kicked off for qualifying Connecticut electric customers, which is funded by ratepayers.
While there is no major bump anticipated for programs that support customers installing renewable power like photovoltaic systems or energy efficiency upgrades, those costs are higher today than a decade ago.
“When you create a new program and you are going to pay out incentives on it, where does that money come from at the end of the day? From the ratepayers,” Novicki said. “They all have good intentions — it's just if you're going to pay people money, that money has to come from somewhere.”
What can be done about electricity rate increase?
With an eye on a potential decrease in natural gas prices this spring, Eversource wants Connecticut
policymakers to approve a formula that would essentially front-load some of those anticipated savings into the current costs for which it is seeking reimbursement. That would lessen the increase it is seeking today, but with customers seeing a shallower drop in electric rates next summer if its modeling on natural gas prices stays true.
“We want to try to avoid that rate shock by aligning it with a known decrease that is coming in July,” Horton said. “Natural gas is going up and down — that's been a major factor in what has driven electricity prices up and down as well.”
The utilities are not the only option for electricity service. “Third-party” suppliers also offer electricity service in Connecticut, and depending on the timing of their own contractual commitments for power, are often able to beat the “standard offer” default rates from Eversource and UI.
Novicki says he uses thirdparty suppliers himself, but warns people to read terms carefully and be vigilant as those deals reach their expiration dates for any rate increases that might be in the offing. Horton and Novicki said it is an easy process to switch back to standard offer if a third-party supplier's rates jump.
Both Eversource and UI offer “time of use” options that charge a lower electric rate during offpeak hours, which Novicki said can benefit those who save the laundry, dishwasher and electric vehicle charging cycles for nighttime or early morning hours.
And mindfulness can move the needle on the meter, he added — things like remembering to turn off devices and lights, adjust the thermostat during the summer months where possible, and other simple steps to cut electricity use.
“We have a pretty impressive suite of energy efficiency offerings — what can you do personally in your home? A lot of times it has to do with weatherizing your home or upgrading aged equipment to more efficient equipment,” Novicki said. “It could be an air conditioner or an electric heat pump or anything along those lines.”
Besides the obvious solution of ratcheting down electricity use where possible, there are programs to reduce monthly payments for qualifying customers or spread them out evenly over time, with Eversource and UI listing those options online and telephone assistance available via Connecticut's 2-1-1 hotline.
Will CT electric rates go down?
Rates can fluctuate, with Eversource and UI filing for rate changes every six months. The fees these companies are looking to collect are specific and they are looking to collect them by the spring of 2025. Assuming that successfully happens, ratepayers could see a dip in their bills again next year.
Does Connecticut have the highest electricity rates in the country?
The short answer is no, Connecticut does not have the highest electricity rates in the county. Connecticut does tend to fluctuate and move around depending on the year and a variety of factors. For instance, policy tied to Millstone has both resulted in rates increasing and falling. A 2023 study had Connecticut as the fourth-highest in the country.
At another point in the same year, a study showed Connecticut was second highest behind only Hawaii.
Global data website Statista recently ranked Connecticut as fourth highest, sandwiched between Maine and Massachusetts and well below Hawaii.