After 16 years of working in Connecticut real estate, Lucas Chaves says he is moving his business to North Carolina.

Chaves is a landlord and owns around ten properties in the state. One of them is a rooming house, and the rest are multifamily complexes, he said. Currently, at least two of his multifamily properties are listed for sale.

“I’m going to live here for now, but all of my business won’t be here,” Chaves said. “Electricity and taxes, those are the two biggest issues.”

This legislative session, a Democrat-sponsored bill lowered the monthly public benefits charge on electric bills by around $30 a month. The public benefits charge funds government mandates determined by legislators. Last year, ratepayers paid $1 billion for the public benefits charge for both Eversource and United Illuminating.

This change may be offset: on May 20, Eversource Energy sent a notice of intent to the Public Utilities Regulatory Authority (PURA) asking to increase electric rates by 11%, starting in July.  

Eversource officials said the company is suffering a revenue deficiency, half of which is because of investments into electric infrastructure, and the other half is because of increased costs of operations and maintenance, and vegetation management.

If PURA approves this rate increase, electric bills are estimated to increase by $25 a month, offsetting almost all of the cost-cutting measures implemented this session.

“In the last 20 years alone, wire and cable costs have soared by 411%, transformers have increased by 265%, and utility poles have jumped by 123%,” Eversource Spokesperson Sarah Paduano said in an email. “We have rigorously managed our operating costs despite this enormous pressure from rising inflation for nearly a decade, but we’ve reached a point where current rates can no longer support the investments needed to maintain and improve such a massive, capital-intensive system.”

Eversource’s request triggered a series of emotional statements from Democrats and Republicans alike.

Multiple statements from Republican lawmakers placed the blame for high energy bills in whole or in part on Governor Lamont. This session, Republicans tried to eliminate the public benefits charge altogether, but their efforts were shut down by Democrats.

Gov. Ned Lamont made a different argument in an impassioned press statement. Lamont blamed the rate increase on corporate greed, claiming that Eversource CEO Joseph Nolan earned $13.5 million and that Eversource made $1.69 billion in profit last year.

Lamont reported $54 million in personal income in 2021, separate from his wife, who has an estimated net worth of $650 million.

In their letter to PURA, Eversource officials said that none of the rate increase money would go toward its CEO’s salary.

“The average Connecticut worker who loses their job goes home and figures out how to survive. If Eversource’s CEO loses his job, the company writes him a check for $16 million,” Lamont said in his statement. “If he’s out of a job because the company gets sold, that check shoots up is $60 million. The people being asked to fund that safety net are the same families who don’t have one.”

In his statement, Lamont said, “What I can do, I am doing” to lower energy bills. He cited investment in nuclear energy as one cost-saving measure that he took. He also said that the final needs to be made by PURA, which is made up of officials whom he appointed.

To Chaves, this distinction doesn’t make a difference.

“I don’t know exactly how it all works, but I think it’s up to politicians to step in and tell Eversource no, you can’t do this, or they have to figure out a way to make the electric cheaper,” Chaves said.

He said that for his rooming house, where he pays all of the utilities, the monthly electric bill in the winter has almost doubled from when he bought the house in 2021 to today. This is despite the fact that he added internal insulation to the entire house for this winter.

“I would guess (electric bills have increased) about 30% over the past two or three years, so it forces you to raise rent at a faster rate,” Chaves said. “So now you know your tenants have to pay more, and you’re, you’re not even making more money.”

He said that he has to increase rent across his properties. The amount of the change in rent varies. For most of the units in some of his multifamily properties, rent has increased by $50 to $100 a year. For the rooming house he owns, where he pays all of the utilities, he has had to increase rent by $25 a year.

These are not trivial amounts to his tenants. For example, there are 14 tenants in his rooming house, and almost all of them rely on a fixed income, he said.

“I deal with a lot of tenants that they’re basically on payment plans for life, because they can just never consistently afford their electric bill,” Chaves said.

He says that landlords across the state are leaving and moving their businesses down south. When they leave, they are often replaced by out-of-state companies.

This, combined with state regulations making building new housing difficult, is making the state less affordable.

“The only thing that keeps Connecticut afloat with the investments is that it’s worse in New York,” Chaves said. “People come from New York because it’s so much worse there, and they think Connecticut is a step up from there with taxes and regulations and bills and all that. But the people that are in Connecticut, they all eventually go down the southern states, where all the expenses are cheaper for them.”

He says that if the rate increase is approved, it would “make everything worse,” both for the housing market and for his own utility bills.

PURA has the authority to reject the request, so the rate increase is not a guarantee.

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