Decades-old utility bill comes due

Who wants to get into the minutiae of their electric bill?

Pretty much no one. We want the lights to turn on and not to go bankrupt when we pay each month. Everything else is details.

Lately those details aren’t making much sense.

Most people aren’t economists, but they understand the basics. If you buy a product and you like it, you might buy it again, or recommend it to others. Whoever makes the best product will prosper, with investors duly rewarded.

That works when you’re buying, say, a dishwasher. The company that makes the best dishwashers will clean up, so to speak. But a dishwasher is a nice thing to have, and not strictly a necessity.

That’s in contrast to the electricity that powers our everyday lives. Everyone is on the grid to some extent. We can’t choose to go without power.

So how, then, do the companies that bring electricity into our homes and offices operate in the same sphere as the dishwasher makers? Put another way, how is Eversource reporting profits, and record profits, at that? Especially as bills rise as eye-popping rates, the news that the electric utility is reporting profits in excess of $1.4 billion is infuriating, yes, but also, to many people, mystifying.

Shouldn’t those profits just go toward lowering bills? It’s not like consumers are making a choice here.

As with everything in this realm, it’s complicated.

Utilities are still monopolies in terms of delivering power. There is no means by which another company could compete there, which would involve creating its own set infrastructure. But the companies do compete in other areas, all of which goes back more than a generation to the phenomenon known as deregulation.

As a resident, business owner, first selectman of Essex and state senator, Norm Needleman sees every aspect of the energy debate in Connecticut. Now head of the General Assembly’s Energy & Technology Committee, he’s leading the fight in Hartford following those giant increases in everyone’s bill that arrived this year.

Until a few decades ago, as he tells it, utilities did everything from produce energy to deliver it to your home. They were highly regulated, operated in one state and offered more or less predictable rates and service. There were plenty of ways to improve, but introducing the free market into the mix was an odd way to go about it.

“The system we created is multiplatform where they sell multiple products in multiple jurisdictions,” Needleman said in a recent interview. There are more and less regulated sectors of those companies, all operating under the same corporate umbrella. It’s no wonder people are confused.

The 1990s featured a wave of deregulation in a variety of industries, but three decades later it’s hard to say how much success it’s had. Prices are somewhat lower, Needleman said, but that is more than likely attributable to vast quantities of natural gas that have become available in this counwe try in that same time frame.

States that didn’t deregulate, meanwhile, have seen the same decline in costs that the natural gas surge brought, but without the headaches and question marks that have become regular features in places like Connecticut.

Adding to the outrage is executive pay. Eversource estimated its CEO’s compensation last year at nearly $13 million, which along with the aforementioned profits and rising bills is enough to put the companies on the public’s mostdespised list.

The blame, though, doesn’t necessarily belong with the companies or even the CEOs, Needleman said, since they’re just operating within the system as it was designed. The blame lies with the designers of that system, and the onus is on current lawmakers to do better.

He’s pushing a follow-up to the Take Back Our Grid Act that followed the mass power failures from Tropical Storm Isaias in 2020. The new bill would further tighten regulation and increase utility accountability. It’s a good next step in the regulatory process.

What we’re not going to get is a return to the old days before deregulated in the first place.

Nearly everyone agrees on that. We’re too far along, it would cost too much and there are too many layers to untangle to go back to the way things were, imperfect as it was. That doesn’t mean we stand pat, either.

The question is why any of this ever made sense. A company that has to think about shareholders and profits is never going to invest heavily in the numbers of people it takes to get back up and running after an Isaias-level event. Instead, the utilities rely on contractors to fill those gaps. It’s better for the bottom line.

When better for the bottom line means a customer’s power is out for a week, that’s where we get problems. Everyone understands that we’re a heavily wooded state. But when the lights are out more than a day or two, no one wants to hear your complicated reasons why the Rowland administration made all this possible. They just want the refrigerator to start working again.

And all of it is a reminder that bad public policy decisions have a shelf life that can be measured in decades.