CT electric bills to drop slightly following new PURA ruling
Shahrzad Rasekh / CT Mirror
PURA Commissioner Marissa Gillett speaks before lawmakers on Thursday, Feb. 20, 2025, in what was an hours-long grilling over her five-year tenure as the state's top utilities regulator.
State regulators on Wednesday approved a slight decrease in Connecticut electric rates over the next year, driven largely by more favorable conditions surrounding the purchase of power from New England’s two nuclear power stations.
All three PURA commissioners voted unanimously to approve rate adjustments for both Eversource and United Illuminating customers.
According to PURA, the adjustment will result in approximately a $13 decrease for an average Eversource customer’s monthly bill and a $3 decrease for the typical United Illuminating customer. The exact amount of savings will vary depending on a customers’ usage and rate class.
The new rates will take effect on May 1 and may last for up to a year or until September, should PURA decide to make another adjustment then.
The reduction was the result of the Public Utilities Regulatory Authority’s annual rate adjustment proceedings, in which regulators review and approve new rates associated with the transmission and public benefits portions of customers’ bills.
The supply and distribution rates, which make up the bulk of electric bills, remain mostly unchanged by Wednesday’s decision.
Claire Coleman, the head of the Office of Consumer Counsel, released a statement on Wednesday casting regulators’ decision as prudent given the large fluctuations in the cost of energy over the last year. Coleman’s office represents ratepayers before PURA.
“This decision reflects OCC’s advocacy to consider both affordability as well as protecting customers from the impacts of market volatility and arrives at the best possible outcome,” Coleman said.
“It is also clear that market fluctuations will impact the cost of electricity for the foreseeable future, and my team and I will continue to do everything we can to promote rate stabilization in the face of volatility,” she added.
The biggest part of Wednesday’s adjustments was the result of changes in the cost of power purchase agreements with two nuclear power plants, New Hampshire’s Seabrook Station and the Millstone Nuclear Power Station in Waterford. Under those agreements, utilities are required to buy power from both plants, and the associated costs are passed onto customers through the public benefits charge.
The Millstone agreement, in particular, was widely blamed for a spike in electric bills last summer that coincided with a period of intense heat and rising demand for electricity.
When the price of wholesale electricity in New England rises above the set prices in those contracts, however, the utilities can sell the energy back into the grid at a profit that gets passed along to customers. That’s essentially what happened over the first few months of the year, according to drafts of PURA’s decision, allowing for a reduction in the public benefits charge.
In its filings with PURA earlier this year, Eversource requested a return of $275 million to its customers as a result of the power purchase agreements. PURA initially proposed a more modest $45 million return, before ultimately settling on $142 million in Wednesday’s decision.
“Today’s decision from the Public Utilities Regulatory Authority (PURA) relied on our evidence to revise its draft decision and increase the credit going back to customers through state-mandated power purchase agreements, including the Millstone and Seabrook nuclear power plant contracts,” Eversource spokeswoman Jamie Ratliff said in a statement. “This adjustment to Public Benefits will provide additional relief to customers at a time when energy bills typically go up significantly due to increased electric usage in the summer months.”
PURA released an explanation of its decision Wednesday, which said that Eversource’s initial request was based on rosy predictions on the cost of wholesale energy related to the Millstone and Seabrook agreements. If those predictions did not pan out, the authority said, ratepayers would be at risk of having to make up those costs in future bills.
“Setting rates now that assume a $275 million ‘credit’ based on pure speculation, as suggested by Eversource, sharply increases the risk of substantial under-recovery, which would result in significant carrying charges and rate shock borne exclusively by customers,” the statement read. “This would necessitate a potentially large rate increase next May, imposing unnecessary financial burdens on customers.”
But, according to PURA, if those contracts with the power plants continue to produce dividends, rates could fall even more in September.
PURA also rejected Eversource’s request to charge customers $75 million to replenish the utility’s storm reserve accounts, after regulators questioned the utility’s rationale that it would save customers in the long run.
In a statement on Wednesday, United Illuminating said the adjustment will decrease the utilities’ overall revenues by $10.3 million.
“With the conclusion of the initial phase of the 2025 Rate Adjustment Mechanism (RAM) process today, PURA has set the Public Benefits Charge for UI customers, which pays for policymakers’ priority programs and which UI does not control or profit from,” spokeswoman Sarah Wall Fliotsos said in a statement. “We encourage our customers to contact their elected officials with any questions or concerns regarding this portion of their energy charges.”
The decision came at a time of immense scrutiny for PURA and its chairwoman, Marissa Gillett. Lawmakers approved the appointments of both Gillett and the authority’s newest commissioner, David Arconti, last week following a months-long confirmation process.
Lawmakers have also debated how to find relief for Connecticut residents, who are paying some of the highest rates for electricity in the nation. Much of that debate has focused on the public benefits charge, a collection of programs mandated by state and federal policy but paid for out of utility bills.
Republicans in the legislature have lobbied to take all those costs off customers’ bills and pay for them with taxpayer dollars in the state’s general fund. More recently, an alternative idea put forward by state Sen. John Fonfara, D-Hartford, would borrow up to $2.4 billion over the next three years to cover the public benefits charge.
Fonfara’s legislation, Senate Bill 1560, was advanced out of the legislature’s Finance, Revenue and Bonding Committee Wednesday on a bipartisan vote. It next heads to the Energy and Technology Committee for further discussions.
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