Connecticut customers will see significantly higher electricity bills starting July 1 after rate hikes of more than 12% as they pay double rates due to government orders such as Energy Assistance, Outage Moratoriums, and the Millstone Acquisition Agreement You will have to pay
Utility regulators on Wednesday approved rate increases for Eversource and United Illumination. Together, these utilities serve 80% of the state's residential customers. The increase was the result of the so-called rate adjustment mechanism, an annual adjustment in which utilities request rate changes based on the cost of mandated public programs.
United Illuminating estimates that the price increase will be an average of $30 per month, or a 12% increase, depending on each user's consumption. Eversource had not yet estimated the impact, a company spokesperson said.
The new rates will be effective from July 1st and will remain in effect for 10 months or until review in September.
PURA commissioners voted 2-1 in favor of the increase. Voting against the bill was Melissa Gillette, the agency's president. She suggested that cost recovery be phased in over two to three years rather than 10 months to soften the impact on consumers.
“Unfortunately, however, today's decision by PURA is likely to impose further financial burdens on those who cannot afford it, and will also be a particularly difficult blow to the pockets of the business community.”Gillette he said in a statement of opposition.
Mr Gillet welcomed the fact that the price increase would take effect in July rather than May, as requested by utilities, as he expects the generation portion of electricity bills to decline as summer approaches.
Electricity rates in Connecticut are among the highest in the country. Reasons for this include the high cost of electricity generation, the region's deregulation, the disadvantage of being at the end of a natural gas pipeline, and the rising prices of renewable energy. From programs that encourage people to pay their bills, to assistance with paying their bills. for those in financial need, and a power purchase agreement with Dominion Energy's Millstone nuclear power plant.
The increase in the adjustment approved for Eversource on Wednesday was primarily due to the Millstone acquisition agreement, company spokeswoman Jamie Ratcliffe said.
“While the majority of rate adjustments consist of pass-through costs necessitated by state policies reasonably designed to benefit customers, this increase is due to PURA deferring costs into the future. and was avoidable,” Ratcliffe said. “The utility portion of the bill, together with the currently decreasing and unstable cost of energy supply, currently accounts for nearly 60% of our customers' bills. We manage these portions of the bill and We are not making any profit from it.”
United Illuminating's lawsuit suggests that the Milstone agreement also had an impact on rate hikes, but to what extent, said Ted Nowicki, director of Connecticut regulatory affairs for Avangrid, the company that owns United Illuminating. It is said that it was small. Nowicki noted that other state programs also contributed to the increase, with a smaller portion related to transmission costs.
Power purchase agreements between Dominion Energy and the two utilities were signed in 2019 following discussions about the potential closure of Waterford's Millstone nuclear power plant. The Department of Energy and Environmental Protection promoted the agreement as a way to ensure stable demand for nuclear power plants at predictable prices.
Under the agreement, the two utilities will purchase a fixed amount of electricity each year, equivalent to more than half of the nuclear power plant's output, at a fixed price. When the purchased electricity exceeds customer demand, the company sells the electricity on the open market. If the market price is higher than the contract price, a profit is made and is passed on to the user. If the price is lower, there will be a loss, which will be passed on to the user in the form of higher fees.
Energy market prices adjusted downward in 2023 after peaks in the previous year related to COVID-19 and the war in Ukraine. This is why both companies recorded losses on the sale of electricity on the open market, and is one of the reasons for requesting rate adjustments.
In a statement, Gillette recalled that Eversource representatives last year classified the argument for an increase as an “extraordinary situation.” Mr Gillet said this was an unusual year and a longer loss recovery period should be considered rather than accepting such rapid repayments and passing the volatility on to ratepayers. Mr. Gillette criticized Eversource, saying he would not invest in other activities that are not part of a regulated utility, such as wind energy projects, if Eversource did not recover the money quickly.
State Sen. Norm Needleman (D-Essex), chairman of the Senate Energy and Technology Committee, criticized Eversource more harshly for the same reasons.
“How can a company with over $1.5 billion in underlying profits sue for unfair treatment the day after Connecticut regulators gave them everything they asked for? Worse, they blackmailed the state of Connecticut and “We will not meet our obligations to build the grid improvements needed to support our policy goals,” Needleman said in a written statement. “Eversource received every penny it asked for this week, but we are still dissatisfied. This behavior is threatening, vindictive, and irresponsible, and leaves ratepayers facing further increases in their monthly bills.” Needless to say, it's disrespectful.”
Rising energy costs are a concern to Operation Fuels, an organization that runs programs to help households with high energy burdens. According to a 2023 Operation Fuel study, 1 in 4 households spends more than 6% of their income on utility bills.
“Connecticut's ratepayers, especially low- and moderate-income residents like those served by Operation Fuel, cannot afford the state's high and escalating electricity bills,” said Operation Fuel Chief Executive Officer. Director Roxana Booth said.
