The Connecticut Public Utility Regulatory Authority (PURA) held a technical meeting to begin their investigation into electric supply rate hikes from Eversource, the primary electric supplier in the region.
The meeting was a joint venture between PURA and the Massachusetts Department of Public Utilities and was intended to jumpstart a conversation about energy costs across state lines. It was held in response to a letter sent to PURA from the Senate Democrats, led by Senate Majority Leader Bob Duff, which argued that, as Eversource is a publicly traded company with an energy monopoly across three states (CT, MA, and New Hampshire), it would be in the best interest of lawmakers from each of them to discuss how they handle regulating the company.
It was also in response to recent rate hikes from not just Eversource, but other electric suppliers which went into effect this week. In a letter to PURA at the end of November, Eversource and United Illuminating notified the Authority and consumers that supply rates for electricity would be doubling in the new year, raising overall costs by as much as 40% for consumers. These prices are set to remain in effect for at least the first half of 2023.
The rate hikes were met with harsh pushback from lawmakers on both sides of the aisle who argued that, in a year of record inflation and rising interest rates, consumers were already struggling to pay monthly bills. An increase in energy costs was seen as an undue hardship on families with enough to worry about going into the winter.
“This should be a wake-up call for the Governor and legislative Democrats, who in advance of an anticipated special session must ask themselves whether there’s more that we can do to shield citizens from this perfect financial storm,” argued House Republican Leader Vincent Candelora in a statement at the time.
Lawmakers and consumer advocates at Tuesday’s meeting made many of the same points while admitting that supply rates can be a complex issue, especially when most of the state’s energy supply comes from natural gas. Natural gas supplies, much like oil and petroleum, have taken a hit due to the ongoing conflict between Russia and Ukraine.
Ultimately, those in attendance at the meeting were looking for PURA to pressure Eversource to be more transparent about the rate hikes. In his testimony, Sen. Duff pointed out the disparity between Eversource’s 40% hike and much lower increases from much smaller municipal utilities in the state.
“I find it inexplicable how a company as large as, and with the purchasing power of Eversource, has seen their standard rate increase more than any electric utility in Connecticut. This is unacceptable and cruel,” stated Duff. “Even more striking, the new Eversource standard rate eclipses the rate increases of the municipal electric utilities in Connecticut, who were able to keep their rate increases at 20% or below. The purchasing power of the municipal utilities is far below that of Eversource and yet time and again deliver to their customers the same product at a far reduced rate.”
To answer some of these questions, Eversource’s Director of Electrical Supply, James Shuckerow, gave a presentation on the current state of electricity generation, which accounts for the supply charges at the center of the inquiry.
“The problem we have in New England is a winter problem. It’s not a summer problem,” said Shuckerow during the presentation. “The reason it’s a winter problem is we rely upon natural gas being transported into New England. That comes across natural gas pipelines. Many of these pipelines were built by the natural gas companies to provide, essentially, residential heating.”
Shuckerow says that those pipelines have a severely limited capacity on colder days, since they are also being used to heat homes with gas heating. He also stated that the problem, historically, in the region has been an overreliance on natural gas. These days, though, and for the last few years, says Shuckerow, the problem has been the current geopolitical climate and our dependence on Russian oil and natural gas. This has forced a move to Liquified Natural Gas (LNG) which is less available and higher priced.
In her opening remarks, PURA Chairman Marissa Gillett stated that Tuesday’s technical meeting was just the first in what will likely be an extended investigation into energy supply practices and a long, multi-state conversation with counterparts in New Hampshire and Massachusetts.
January 8, 2023 @ 8:25 am
My first comment is to get our corrupt Governor, Senators, Representatives, who are supposed to work for the American people, to start putting more heat on the corrupt Biden administration to bring back oil production to the states. We should not be dependent on any other country for any energy. We have plenty right in our own country. My second comment is two years ago supposedly PURA looked into the high distribution rates, with good old Dick Blumenthal and others and…waiting, waiting, waiting…nothing happened then, doubtful anything will happen now. Go back to comment one! So tired of this facade or pretense in “helping” CT.
January 8, 2023 @ 8:33 am
if people can choose a solar and wind option for energy provider, can we choose a 100% fossil fuel option since it is still the cheapest energy?
January 8, 2023 @ 8:49 am
The bigger issue are the delivery rates. although the new generation rates are disgusting, they could go down in 6 months.
The delivery fees go up with every new solar customer. Why? Because they cease paying delivery fees. Delivery fees cover everything from poles, wires and transformers to trucks, buildings and all their salaries. It even goes to their political donations. Why are solar customer exempt from maintaining the grid they send power to all day and draw from all night? why are they exempt from paying to repair and replace poles, wires, transformers? Why are they exempt from paying the Eversource CEO millions of dollars?
Better yet, why is that responsibility passed on to non-solar customers?
Why hasn’t this story been written in CT. I’ve read it elsewhere but not in CT yet, WHY NOT?
January 8, 2023 @ 5:54 pm
Politicians are the main source of high energy costs in New England. This rate shock is on the energy component of the bill, and is due to the high cost of delivering natural gas to New England in the winter thanks to political opposition to new pipeline capacity for more than a decade. Peaks are usually met by the use of LNG, but that is at a premium because Europe is bidding up the price due to its political decisions to make it a vassal of Russia. the utilities don’t profit from the cost of energy, it is a pass-through. The way that electricity is procured has been set by PURA, and the process is supposed to be monitored by the regulators.
There is a lot of belly-aching over salaries of executives and increasing costs on the delivery components of the cost of electricity. These costs are set through rate proceedings with approvals again from the politically appointed regulators. If service and overhead costs are too high, the regulators should be dealing with that there. This is where rate-of-return profit is set.
We are tired of the games played by the politicians. There is a symbiotic relationship between regulated companies and the politicians who install and direct the regulators. Utilities will pretty much do whatever the politicians want, as long as they can recover their costs, which is what happens in the rate cases. Demanding that the utilities contribute more money to this program or that is simply shifting costs onto other ratepayers. The utilities oblige, and they keep quiet about the hidden taxes they collect within the delivery rates. the state collects more revenue when rates go higher because the hidden tax is a percentage of gross receipts. The utilities also contribute money back to key state politicians to keep their compliant friends in office.
One hand washes the other, and the charade goes on and on while ratepayers and taxpayers continue to bleed. Journalists need to dig deeper into how this all works rather than simply playing along.
January 9, 2023 @ 9:33 am
Well said Tim!