Electric Bill Rate Increase Update

August 19, 2024


 
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Dear Neighbor,

By now, you all know about rate increases to your electric bill. Would you happen to know why?

It's true that customers typically use an average of 35% more electricity during the summer months to stay cool, and this summer, Connecticut is experiencing one heat wave after another. That's a primary cause of the greater electric usage and higher bills that most customers are seeing. 

The secondary driver, but likely the most notable increase when looking at the bill (unless you’re looking at the month-to-month comparison of usage), is the increase in the Public Benefits portion of the bill. Other reasons for the increase include the Millstone power plant in Waterford and because of uncollectables from the shutoff moratorium. 
Regarding the Public Benefit portion of the bill, the Public Utilities Regulatory Authority (PURA) had one option on the table, to phase in the increase over 22 months, to avoid rate shock. The utilities advocated for a 10-month recovery vs 22 months instead, which,  ultimately was accepted by 2/3 PURA commissioners.
 
MILLSTONE
CT Insider

Approximately 77% of that increase is the result of Public Act 17-3, which was a Republican-led deal that requires Eversource and UI to purchase power from the Millstone power plant. The legislation required the state’s electric distribution companies, Eversource and United Illuminating, to enter into power purchase agreements with the only remaining nuclear power plants in New England, Millstone and Seabrook in New Hampshire.

Under the law, Eversource and UI were required to enter into fixed-price contracts, also known as power purchase agreements (PPAs), with the Millstone and Seabrook electric generating stations.

The PPAs required Eversource and UI to purchase supplies from these generators beginning in 2019. Eversource and UI re-sell that supply into the marketplace. When supply market prices are higher than the fixed price in the contracts, the revenues are applied to customers’ bills as credits (this occurred in January 2023). When supply market prices are lower than fixed prices in the contracts, the losses - or costs incurred by the utilities - are collected from customers.
 

MRSC

Around 23% of the increase is due to assistance programs like the Low-Income Discount Rate that was championed and voted on almost unanimously by both Republicans and Democrats in the Take Back Our Grid Act (sec 5) and unpaid bills during the COVID moratorium for those suffering from financial hardship. The moratorium did not preclude people from being on a payment plan. The moratorium prevented those who did not pay from being shut off. Since the moratorium has been lifted, utilities can shut people off and return to some of the pre-Covid collection practices. 

The moratorium was not debt forgiveness. If a customer does not pay their bill, they are in arrears (debt). That debt stays with them, it is not forgiven. The utility(s) will work with them to put them on a plan to pay down that debt. As customers pay back their debt from the moratorium that money will go back to the utilities. That money will get adjusted in future RAM proceedings, meaning, when the money is paid back it will be reflected as a decrease in the public benefits portion of your bill.

The EV Docket was in response to a DEEP policy document, the EV roadmap. We hear consumer frustration, and we think that cost recovery for these programs should be considered and delayed as first proposed by PURA’s motion ruling in mid-May.

While we intend to evaluate the public benefits charge during the next legislative session that begins in January 2025, previous action to control electricity costs is just coming online. We passed the Take Back Our Grid Act in 2021, which contained some significant reforms, including strengthening PURA's ability to scrutinize and review rate increases and performance-based regulation.
In 2023, PA 23-102 became law, and it is robust pro-consumer legislation that provides predictability and transparency for rate payers and prohibits utility companies from using electric rates to pay for their lobbying, marketing, and travel/lodging for company executives.

At the federal level, the U.S. Department of Energy has also selected the Power Up New England proposal submitted by Connecticut and its neighboring New England states to receive an award of up to $389 million through the second round of the Bipartisan Infrastructure Law’s competitive Grid Innovation Program (GIP). Power Up features significant investments in regional electric infrastructure that will provide the New England region with access to thousands of megawatts of offshore wind, greater resource diversity, and increased reliability while lowering consumer costs and reducing greenhouse gas emissions.

If you are struggling financially, call your power supplier before missing a payment if possible. Programs are available, including financial hardship designations that provide access to a Low-Income Discount Rate and payment arrangements for customers in need; energy assistance through the state Department of Social Services; negotiated flexible payment arrangements for non-financial hardship customers; and energy efficiency programs offered by utilities to evaluate customers' homes and provide rebates and discounts on needed improvements.

As always, please feel free to contact me with any questions, comments or concerns at Josh.Elliott@cga.ct.gov or 860-240-8585.

Sincerely,

Josh Elliott
 

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