Like most years, Eversource and United Illuminating customers will see larger bills in January as the Public Utilities Regulatory approved new rates for the first six months of 2021.
PURA approved a “winter” rate of 8.391 cents per kilowatt hour for Eversource – up from the current rate of 7.375 cents – and approved a rate of 9.369 cents for United Illuminating – up from the current rate of 8.667 cents.
The new rates will take effect on Jan. 1, 2021, and extend through June 30.
The proposed winter price will cause a noticeable increase for customers between December and January, but rate is also lower than winter rates in any of the previous three years — and more than a cent per kWh less than the 9.414 cents per kWh customers paid in the first six months of 2020.
Eversource said in a news release that the new rate would increase the cost of electricity for the “average” customer using 700 kWh a month by about $7.11 a month on the supply portion of their bill. A customer’s actual bill will depend on their usage, their rate category, and weather conditions, the company said.
In the deregulated energy market, state law requires distribution companies like Eversource and United Illuminating to participate in auctions twice a year to secure power supply. The companies secure contracts with the lowest bidders and pass the costs on directly to consumers without marking them up for profit.
A higher rate from January to June is typical because of the higher costs of producing electricity during the winter months, when higher demand on resources like natural gas causes prices to rise.
Eversource spokesman Mitch Gross said the supply can’t keep up with that increased demand in the winter months because of the constraints of natural gas pipelines in New England, which do not have the capacity to deliver all the natural gas needed to fire the power plants that provide about half of the region’s electricity.
“Energy supply costs are an issue not only in Connecticut, but across New England,” Gross said. “A lot of times when it comes to energy prices, it has to do with geography. Here in the Northeast, we’re at the end of the pipeline, so the transportation costs to get fuel here drives prices up.”
Based on Eversource’s model of an “average” customer using 700 kWh of electricity a month, the proposed 2021 rate would cost per month: $7.34 less than the 2020 rate, $12.44 less than 2019, $4.98 less than 2018 and $3.44 more than 2017.
When asked about how the winter price compares to recent years, Gross said it’s still higher than what customers are currently paying. The company understands that’s what customers are most concerned about, he said.
About three-quarters of residential electric customers in Connecticut receive standard service generation from Eversource and United Illuminating, according to PURA. The remaining quarter get their service from a licensed supplier, which may have higher or lower rates depending on the source and the terms of the contract.
“Like our customers, we have no control over fluctuating energy prices, but the myriad of energy-efficiency programs we offer can help people reduce their usage, tighten-up their homes and keep energy bills down year-round,” Eversource Senior Vice President and Chief Customer Officer Penni Conner said in the company’s news release. “We also offer various payment arrangements for customers who are having difficulty paying their energy bill, including the COVID-19 payment plan which allows them to pay past-due balances for up to 24 months.”
The rate announcement comes a week after PURA declined to extend a moratorium on utility shutoffs, including electricity, despite Eversource’s requests that it keep the moratorium in place. There are currently 125,000 households served by Eversource in Connecticut that have a past due balance of greater than $125, leaving them eligible to receive a disconnect notice, according Eversource Vice President of Operations Jessica Cain.