Energy Public Hearing Thursday, March 4 on Electricity Rates

Posted on March 1, 2021


The Energy Committee will be hosting a Public Hearing on SENATE BILL 882 scheduled for THURSDAY MARCH 4 AT 10:00 AM – AN ACT CONCERNING CLIMATE CHANGE MITIGATION AND HOME ENERGY AFFORDABILITY. In this bill the governor’s law to require zero carbon emission by 2040 will be discussed. While well intentioned, this law would continue to significantly increase our electricity rates with mandates to use more “green power” sources.

I wish there was one factor that can be pointed to for causing our high electric rates however there’s many factors. I find it frustrating that these high rates are driving people from CT, along with our excessive taxation. I will continue to focus on working to give CT some relief from these oppressive rate increases. In comparison to the rest of the country, Connecticut consistently ranks high for electricity prices. Generally, residential electric rates for the New England states average 20.97 cents per kWh (21.41 cents in CT) while the national average is 13.35 cents per kWh.

Please consider testifying on this bill on 3/4/2021.

Please follow this link to learn how to participate by testifying at public hearings: cga.ct.gov/asp/content/yourvoice.asp

Background information on the state’s energy usage

Geography and natural gas reliance:

CT’s electricity is heavily reliant on natural gas power plants. Natural gas basins are not found in New England and are supplied through pipelines that connect to the Gulf states and the Appalachian basins. The demand for natural gas has outpaced the interstate gas transmission lines and they have not expanded to meet adequate supply needs. Gas companies with “firm” contracts supplying gas to residences and businesses for heating demand take precedence over the intermittent contracts of gas powered power plants. The natural gas power plants lose access to the gas they need to generate electricity and must resort to using fuel-mix generation at a more premium price. At this time, it appears unlikely that new pipelines will be built to serve this region.

Environmental and renewable energy mandates:

New England’s heavy reliance on natural gas is driven by the state’s aggressive greenhouse gas initiatives and increasing renewable energy portfolio requirements. Unlike many of the midwestern and southern states, New England states have some of the strictest environmental air quality standards and are participants in the Regional Greenhouse Gas Initiative (RGGI) that caps CO2 emissions for power plants and enables a “cap-and-trade” system whereby a more pollutant emitting power plant can purchase credits from cleaner plants. In addition, all New England States, except Vermont, have renewable portfolio standards (RPS) that requires the power sold in their states to come from renewable energy sources. Since the energy market price is relatively low, the higher cost of renewable energy contracts are passed on to ratepayers. The states statutory RPS requires 44% of the power to be from clean energy sources by 2030. Governor Lamont expanded this mandate and issued Executive Order 3 that directed DEEP to achieve a pathway towards zero-carbon generation by 2040.

Cost of doing business:

Business costs in CT exceed the national average and these costs are reflected in the utility rates. The cost of salaries/wages, land, & taxes (including property taxes) are some of the highest in the nation and those costs get passed on to the ratepayers. Electric utilities are subject to an 8.5% gross earnings tax for providing electric transmission or distribution services.

Transmission Congestion:

Transmission congestion is when there is a lack of transmission line capacity to deliver electricity without putting a strain on the thermal, voltage and stability thresholds. Over the years, Eversource and UI has spent billions of dollars upgrading transmission lines (Middletown-Norwalk and Bethel to Norwalk) in order to reduce transmission constraints. These costs are spread across the ratepayers. While transmission congestion is not a problem at the moment, there are concerns that added transmission investments will be needed once offshore wind power will be fed into the grid.

There are a couple proposals, such as HB 5638 that would review the distribution rates and review whether the electric delivery system can benefit from competition. However, even these proposals face complex legal and finance challenges.

Please contact PURA (CT’s Public Utility Regulatory Authority) at https://portal.ct.gov/PURA/About/Contact-Us – and give them your input on the state’s electricity rates.