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Scott Pearson couldn’t believe his electric bill. In just a month, the Monroe resident’s bill jumped by $40 to more than $200.
Others fared much worse. Friends and colleagues posted to social media their own dismay at electricity rate hikes from both Eversource and United Illuminating (UI). But who was to blame for the spiking prices? Was it simply corporate greed? Not so much. In fact, UI officials told customers, “It’s not us. It’s policymakers.”
“UI is required by law to incur certain costs and pass them on to customers. These state-mandated costs are increasing by 12%,” the provider stated on its website. “We don’t make even one cent of profit on these costs. Contrary to widespread misinformation, none of this increase will contribute to UI’s revenue.”
UI added, “We want to dispel the myth that these increases will benefit our investors — they do not.”
Connecticut electricity bills incorporate a fee known as the Combined Public Benefits (CPB). It funds the cost of government mandates for grid reliability, affordability, clean energy and a host of other state energy policies. These costs are passed directly to consumers, providing no revenue to the power companies. In July, household ratepayers were shocked to see their CPB increase by nearly $34 for UI and $48 for Eversource. Those using more than 700 kWh of electricity a month saw their CPB increase even more.
Meanwhile, to make matters worse, Constitution State residents are already burdened with one of the top five most expensive electricity rates in the United States.
Pearson decided to act, creating an online petition calling on Gov. Ned Lamont, Public Utilites Regulatory Authority (PURA) (the state agency that oversees and regulates Connecticut’s utility companies), the Connecticut General Assembly and other state officials for relief.
Since the petition’s launch on July 28, nearly 60,000 individuals have signed it. Although he has not achieved his 100,000 mark yet, Pearson’s plight has prompted bipartisan legislators to take notice, with even the possibility of a special session prior to the November election. In a statement, the governor’s office agreed that “Connecticut residents are paying too much for electricity,” adding, “This is not a partisan issue as we all agree that we need a solution to lower energy costs.”
But the bad news keeps compounding.
On Aug. 14, PURA exacerbated public discontent, approving a hike for Eversource and UI to recoup $80 million in costs for electric vehicle (EV) charging grid enhancements and rebates. Given the expense of buying an electric car, this infrastructure has generally benefited the state’s wealthiest towns, meaning Connecticut’s affluent are being subsidized by residents of modest means.
The widespread recent outrage is long overdue. For decades, flawed energy policy has been driven by government bureaucracy and overregulation at the state and national level.
During the pandemic, there was a moratorium on disconnecting people’s electricity when they did not pay their bills. While all other New England states rolled back this policy by July 2021, Connecticut ended the moratorium only last May, meaning responsible residents were exploited for years.
The Constitution State has also committed itself to green energy, setting ambitious carbon emissions reductions (or decarbonization) goals, aiming for a 45% cutback of greenhouse gas emissions (GHG) by 2030. As part of that, politicians promised to buy nuclear energy from the Dominion Millstone Power Station — the state’s only nuclear energy facility — at an unknown cost. This was the only way to both reduce emissions and guarantee electricity that was always available. Of course, these costs fluctuate, and right now, they are expensive.
And these are just the factors from the past decade. Other culprits have links to the beginning and the end of the 20th century. When the U.S. Congress passed the Merchant Marine Act of 1920 (also known as the Jones Act), foreign-flagged ships were blocked from moving goods between U.S. ports, effectively eliminating maritime shipping as an option for people looking to move goods between Connecticut and other states. The law has left New England relying on Russian liquified natural gas (LNG) during cold snaps.
Nearly a century later, in 1998, the Connecticut General Assembly approved the Renewable Portfolio Standard (RPS) rules, requiring electric providers to sell or purchase renewable energy credits (RECs) from renewable sources like solar and wind, and inexplicably, burned trash. This has severely restricted the ability of utilities to find the cleanest and most efficient means of providing electricity to Connecticut’s residents and businesses.
Initially, the RPS was passed to create well-paying jobs for Connecticut residents in an emerging energy sector. Yet these jobs have materialized instead in Maine, New York, and Quebec, where wood-burning biomass and hydro-power facilities meet most of the RPS requirements for our state. This outcome contradicts the original intention and promise of the RPS and requires re-examination.
Additionally, Connecticut has limited its natural gas pipelines, which it should expand, such as the one proposed called “Project Maple” — a Canadian-owned pipeline that runs from New Jersey, New York, Connecticut, Rhode Island and Massachusetts. More natural gas equates to lower energy costs for our state’s residents.
Repealing red-tape and expanding energy options are a tough sell in a state where progressive lawmakers are poised to propose expensive new “green” initiatives in the upcoming legislative session. But with winter on the horizon, electricity bill woes will burden residents for the foreseeable future.
Without some common sense legislative reform, policymakers should only expect the voices of discontented constituents, like Pearson, to grow ever louder.
Carol Platt Liebau is the president of Yankee Institute, a Connecticut-based free-market policy organization.