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Connecticut last week was told to expect a 50% increase in electricity prices this winter and supposedly there is nothing to be done about it — except to rail against the electric utilities, though they are no longer responsible for power prices.
Twenty-four years ago state government took the electric utilities out of the power generation business, restricting them to distribution. Since then electricity users are supposed to do their own purchasing of power from generation companies, which route their power into the distribution system. People who don’t want to purchase their own electricity still can have their utility buy it for them, but the utilities just go into the market themselves to purchase the power and pass the cost along to their customers. The utilities don’t set electricity prices and make no money from them.
This system was enacted to inject price competition into power generation, but politicians and customers alike still like to blame the utilities for price increases. So the new controversy invites another reform — prohibiting the utilities from doing even the default buying for customers and requiring customers to do their own purchasing.
Misleading sales tactics by power generators could be specified and prohibited, with their offers restricted to the simplest terms, a fixed price over a single fixed duration.
Or the utilities authority itself could do the default purchasing. This would discourage politicians from demagoguery against utilities. But it also would make them take responsibility for something important that is watched closely, so it will never happen.
Democrats, including state Attorney General William Tong, blame the electricity price increases on Russia’s war against Ukraine. While the war has interrupted flows of Russian oil and gas to Europe, causing Europe to compete for other sources, there is a bigger cause of energy price increases in the United States. It is the national Democratic administration’s pledge to destroy the country’s conventional energy industry — not just coal, which still produces much electricity, but also oil and natural gas, the latter producing more than half the electricity used in Connecticut.
The attorney general says, “We need to take a hard look at our energy sources and reduce our reliance on sources like natural gas that produce these wild, unaffordable surges in rates.”
Nonsense. Natural gas didn’t cause its own price increase. Gas supply is fairly constant and the country can produce far more than enough energy for its own needs. Meanwhile alternatives to conventional energy are not yet adequate, reliable, or economical.
That is, the country has neglected its energy security and no one is taking responsibility for the policy mistake.
Maybe the most sensible observation about the electricity price increases came last week from the leader of the Republican minority in the state House of Representatives, Vincent Candelora of North Branford. State government, Candelora said, should study whether its energy policy “balances concerns and concepts from environmentalists with the palpable stress of ratepayers who find themselves digging deeper and deeper to pay their bills.”
Maybe the colder the winter gets, the less persuasive environmental extremism will seem.
Rather than question conventional energy sources, as the attorney general urges, Connecticut should question where inflation comes from, since it is affecting everything and was raging long before the war in Ukraine began.
At bottom inflation is an imbalance between production and money creation, and since money creation is government’s work, inflation is a policy mistake of government. But since Donald Trump has been out of office for almost two years, Connecticut Democrats can’t figure out whom to blame.
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Just a few weeks ago Governor Lamont disagreed with his Republican challenger, Bob Stefanowski, who advocated using state government’s surplus funds to ease financial burdens on state residents.
But now the governor and the Democrats who control the General Assembly have come out in support of using the surplus to do just what the Republican proposed. They would extend the suspension of the state gas tax, quadruple the “heroes fund,” and increase electricity subsidies for the poor.
What a nasty guy that Stefanowski was, huh?
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Powell is a columnist for the Journal Inquirer in Manchester, Connecticut. (CPowell@JournalInquirer.com)