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November 28, 2022

Lamont, utilities plan to provide relief to electric customers as rate hike looms

Photo | CT MIRROR
By Andrew Larson

Eversource and United Illuminating have agreed to work with state leaders on a plan to provide help to electric customers with their bills this winter, amid record-high energy prices and a rate hike that is set to go into effect Jan. 1.

Gov. Ned Lamont announced the partnership Monday morning, two weeks after the electric companies filed requests to increase their standard service supply rates with the Public Utilities Regulatory Authority for the first half of 2023.

Eversource supply rates will increase from 12.1 cents per kWh to 24.2 cents per kWh, costing the average residential customer who uses 700 kWh of power an extra $85 each month  – a 48% rise. The company’s standard service rate was 11.5 cents per kWh last year.

United Illuminating supply rates will go from 10.6 cents per kWh to 22.5 cents per kWh, resulting in a $79 increase for the average user.
 
Lamont said that Eversource and UI will file a motion with PURA seeking approval to “fast-track” the return of long-term power contract earnings to customers in the form of a bill credit. The clean energy contracts are part of an initiative by the Lamont administration to help secure the future of the Millstone nuclear power plant and other carbon-free generation resources.

The proposal will provide Eversource customers with a monthly bill credit of around $10 per month during peak winter months starting Jan. 1 through April. 

The companies will also seek approval for a discount for low-income hardship customers, enabling a low-income discount rate starting in January until a new PURA-approved low-income discount rate goes into effect in 2024.

The plan also includes an Eversource shareholder expense of $10 million for energy assistance to customers in need, including moderate and middle-income customers who are struggling to pay their bills.

UI has agreed to pay $3 million to Operation Fuel for direct assistance for electricity and heating costs, subject to PURA’s approval.
 
“Complex issues call for creative solutions, and this public-private partnership paired with the energy assistance actions expected to be taken by the General Assembly in special session today will provide residents with some much-needed relief and protection this winter,” Lamont said.

Eversource President Steve Sullivan said that while the power company can’t control the supply side cost of electricity, it is important to provide relief to customers.

“Although market conditions are tough, Connecticut’s decision to commit to contractual arrangements like Millstone is paying dividends for customers and is critical to help offset bill impacts for customers this winter,” Sullivan said.

Distribution rates are dictated by strict costs to utility companies, which fluctuate based on the wholesale price of electricity. Connecticut has been heavily impacted by a global spike in the price of natural gas, largely due to supply shortages sparked by the war in Ukraine.

Most of Connecticut’s electricity is generated by natural gas-fired power plants.

In addition to Lamont’s plan, the General Assembly is expected to approve the following bills in special session Monday:

  • Supplementing this year’s $98.5 million of federal Low-Income Household Energy Assistance (LIHEAP) funding with an additional $30 million in American Rescue Plan Act (ARPA) funding to the Connecticut Department of Social Services (DSS). This additional state-directed funding substantially mitigates the impact of unusually high energy prices and will help ensure that funding for the state’s energy assistance program (the Connecticut Energy Assistance Program, or CEAP) is available to low-income households.
  • Requiring PURA to direct at least 95% of proceeds from fines in fiscal years 2023 and 2024 (including an anticipated fine in excess of $4.4 million) to nonprofit energy assistance programs, such as Operation Fuel.
  • Extending the ongoing suspension of the state’s 25 cent-per-gallon excise tax on gasoline through December 31, 2022, and then phasing it back in over a period of five months at five cents per month through May 2023. (Connecticut is one of only three states in the country that have a gas tax suspension in effect.)
  • Extending the ongoing suspension of fares on all public transit buses through March 30, 2023, which is the maximum date that complies with 12-month length-of-time federal restrictions for temporary public transit pilot programs.

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