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Despite High Electricity Costs, New Electricity Tax Proposed for Connecticut Residents

A bill to create an “Environmental Infrastructure Bank” would add a one mill per kilowatt hour tax onto electric bills for Connecticut residents, who already pay the highest electric rates in the continental United States, according to the Global Energy Institute and U.S. Energy Information Administration.

The tax will be used to fund the Connecticut Earth Bank, a quasi-public entity which would “promote investment in environmental infrastructure,” similar to the Connecticut Green Bank which focuses on investing in renewable energies for Connecticut.

The Connecticut Earth Bank, however, would focus on development, structures, equipment and technology “related to the management or preservation of the natural resources of the state.”

But for Connecticut residents and businesses already facing the highest energy rates among the 48 contiguous states, the added tax may just be another added cost to living in Connecticut.

Rocky Hill resident John Chunis offered written testimony on the bill, which faces a public hearing before the Environment Committee on Monday. 

“This is highly regressive, as low-income citizens, families and retirees, are struggling to make ends meet on a daily basis, and if this bill passes, they will have to pay even more for their electricity,” Chunis wrote.

Connecticut’s electric companies are not thrilled with the idea, either. Mitch Gross of Eversource said that although the company supports the environmental goals of the bill, they are concerned with its affect on rate-payers.

“We are concerned because funding would mean an additional charge on our customers’ electric bills,” Gross said. “We’re always mindful of the effect the price of power has on our customers, particularly those who are facing difficult financial circumstances.”

Likewise, Edward Crowder, spokesman for Avangrid, which owns United Illuminating, said the company opposes the bill in its current form, saying the Earth Bank “appears to have no relationship to energy production or utilization in Connecticut.”

This new tax would also be assessed in a very regressive manner. It would be imposed on all electric ratepayers of the electric distribution companies in Connecticut but not those serviced by municipal utilities, resulting in approximately 6 percent of the state’s residents being exempt from the tax. It would also be imposed regardless of a person’s income, and would most impact those with the least ability to pay.

Edward Crowder, Spokesman for Avangrid

“This new tax would also be assessed in a very regressive manner. It would be imposed on all electric ratepayers of the electric distribution companies in Connecticut but not those serviced by municipal utilities, resulting in approximately 6 percent of the state’s residents being exempt from the tax,” Crowder wrote in an email. “It would also be imposed regardless of a person’s income, and would most impact those with the least ability to pay.”

Connecticut has a poor history when it comes to maintaining banks of revenue funded by taxpayers and electricity rate payers, which have frequently been raided by the legislature to fill budget gaps rather than being used for their stated purpose.

The Connecticut Energy Efficiency Fund is funded by a surcharge on Connecticut residents’ electric bills as well as revenue from the Regional Greenhouse Gas Initiative. The revenue is used to fund a number of different energy initiatives.

However, that fund was raided for $175 million as part of the 2017 budget agreement to solve a massive budget deficit driven largely by Connecticut’s fixed costs. The raid reportedly cost jobs in Connecticut’s energy efficiency market.

Similar funds like the Tobacco Fund, meant to fund anti-smoking programs, and dedicated funding to install seat belts on school buses have been used in the past to fill budget gaps as well — to the point lawmakers finally put the school bus seat belt fund to rest.

Quasi-public entities in Connecticut, including the Green Bank and the CT Lottery Corp., are generally funded through a variety of investments, private partnerships or dedicated revenue streams, but they also open the door for high executive salaries.

Bryan Garcia, CEO for the Connecticut Green Bank, earned a salary of $210,104 in 2018. Similarly, the former CEO of the Connecticut Lottery Corp. Anne Noble earned $221, 806 before resigning with a lucrative separation agreement following a lottery scandal.

Despite being quasi-public agencies, employees and directors are considered state employees and entitled to state benefits, meaning the creation of a new Connecticut Earth Bank would add more employees and a board of directors to Connecticut’s payroll, all funded through a new tax on consumers’ electric bills.

The Earth Bank would also be able to issue bonds and make loans, according to the bill.

In general, according to the Global Energy Institute, electricity costs in the Northeast were higher than in any other part of the country besides California.

Global Energy Institute said the discrepancy between Northeastern states and the rest of the country was due to its reliance on natural gas for power combined with residents’ unwillingness to expand the existing infrastructure to deliver that natural gas.

The only other states with higher energy costs than Connecticut were Hawaii and Alaska, according data from the U.S. Energy Information Administration.

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(21) Comments

  1. Kathy

    March 22, 2019 7:36 am

    I’m budgeted at $465 a month my house is 1200 sq ft this isn’t normal heats off all day

  2. Ralph

    March 19, 2019 10:33 pm

    Residents unwillingness to expand infrastructure? I’m in the heating business.
    Opposition comes from oil companies and propane companies.

  3. Margie

    March 19, 2019 12:36 pm

    This is really ridiculious, We the Working Middle Class are the ones paying for of this bull shit and suffering the consequences…there isn’t a break for us…Working just to barely survive in Ct. Electricity, Gas, Oil, Water, Housing and Health Insurance are so expensive. We are going to have consider moving out of State.

  4. alex

    March 19, 2019 10:55 am

    There is no surprise to this – Ned laid out a blue print on all the ways to raise revenue – tolls, taxes, nothing should be a surprise.

    The surprise is CT residents are still stupid enough to vote him in

  5. sir

    March 19, 2019 6:57 am

    just legalize marijuana already it will provide all the money this state could every need.

    • Bob

      March 19, 2019 7:54 pm

      Smoke another one, people are already stupid enough in this State.

  6. Margaret Soda

    March 18, 2019 10:17 pm

    This is ridiculous, all I ever read about is a new tax on this a new tax on that. What the hell is going on and how much do they think they can tax every thing. Try to stop spending on all the new sports fields in Hartford and worry about a real budget instead of taking every last penny in every one’s pocket.

    Margaret Soda

  7. Ron

    March 18, 2019 8:24 pm

    2 words: CUT SPENDING!!!

  8. Brian Taylor

    March 18, 2019 8:20 pm

    Eversource only complains because this will make it harder for them to raise their own costs (which is also likely to happen) to account for the customer base that has and continues to switch over to solar. Probably another reason why CT solar incentives are expiring soon. Go solar and all this hoopla will not even apply to you. Email Brian.taylor@elitesolarpros.com or call direct (860) 810-9309 for a free, no cost quote and the lowest rates guaranteed.

    • Steve

      March 20, 2019 3:19 pm

      Eversource has been ripping off CT customers since day one. Eversource charges more in delivery charges than your entire bill so you are really paying double. This is in sane when all you ever see is Eversource trucks hiding somewhere in their truck. Eversource has no business crying about new laws about ripping us off since that have been doing it forever with no recourse.

  9. Craig Harrigan

    March 18, 2019 6:24 pm

    One mil is one dollar per thousand. If your total utility bill was $1000 then it would be $1001 next year. Eversource charges you a fixed monthly fee that is 100 times more annually. This money goes to help folks become energy independent by doing residential and commercial efficiency projects that anyone in the state can take advantage of. The argument that low income folks cannot afford the $1 per $1000 spent annually is a joke considering what the utilities charge. The utilities are sending this message out and deliberately fooling the populace.

    • Dan hoagland

      March 22, 2019 12:18 am

      You’re missing the point. This state has shown time and time again that these ‘special funds’ cannot be trusted in the hands of the state. Their intended purpose is just a guise as the state will use it for their gaps instead of what they were created for. 1$ out of our pocket is 1$ too much. Under your logic, let’s say the avg salary in CT is 1k. The state should just create 1k more $1 taxes. Because, it’s just $1, and who couldnt afford that. How about instead fighting for your paycheck and your money and become more charitable then back broken state run programs.

  10. Timothy Hill

    March 18, 2019 6:11 pm

    Paying 230 to 300 a month now, that’s at 6.99 rate for supply from a different company!!} delivery charge is way higher than supply rate!!! Stop the tax and spend CT!!!? If people keep leaving the state, their will be no funds to pay your bills!!! Stop making up funds to steal!!!! Stop spending money like a drunken sailor!!!{

  11. Frances Sessa

    March 18, 2019 3:16 pm

    Lamont seems to be in a candy store with all his proposed Taxes being the proverbial CANDY. We are a mismanaged state and NO amount of Taxes will cure that. We need strict Leadership and the Ability to CUT SPENDING and eliminate Programs that aren’t working. Lamont is giddy with his proposed Taxes. Sober up and work with the Republicans who seem to have a better towards a fiscally responsible budget. We don’t need another Tax and Spend ADDICT running the state.

  12. Sue Kilmer Duff

    March 18, 2019 12:33 pm

    This is insane can’t afford to live in Ct

  13. Bill W.

    March 18, 2019 10:28 am

    We don’t need another tax on electricity to increase our already high costs. It would create another slush fund for the legislators to raid, as has been pointed out in this article. It’s time to stop their idiotic policies.

  14. Robert Jones

    March 18, 2019 7:39 am

    Electric is too high now.Cant afford any more.

  15. William

    March 17, 2019 6:30 pm

    I cant afford my electric bill now its so hard im on a fixed income social security .The new governor must hate us so he wants all to move shame on him.

  16. dirtyjobsguy

    March 17, 2019 1:34 pm

    The same is true for natural gas. I’m finally getting a gas line to my house in Simsbury and I looked to compare gas prices to other states. Again the residential price for Natural gas in CT is about 38% higher than the USA average. Some of this is related to the difficulties in a densely populated area with rocky terrain, but most is the excessive regulation and cost adders from the state and local governments. The utilities have been trained to not make a big deal about these impacts or their rate cases will be treated adversely. No wonder everyone leaves the state to retire. Not just your taxes but your utility and other bills will drop dramatically.

  17. Marge

    March 17, 2019 11:26 am

    Am paying over 300.00 a month now and I am retired living on a fixed income

  18. Jim

    March 16, 2019 5:45 pm

    The high cost per KWH in Ct os not due to reliance on natural gas. Our distribution costs alone exceed other state’s total kWh costs.

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