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Why are electricity costs spiking in Connecticut?

Why are electric costs going up in Connecticut? Does it have to do with a 2017 bill passed related to the Millstone nuclear power plant?

Millstone is a major supplier of electricity to the New England market. According to a 2019 Reuters article, Millstone provides around half of Connecticut’s electricity, and 98 percent of its carbon-free energy. 

Millstone used to have to compete in the electricity market with other producers who were not carbon-free, which kept their prices artificially low.

The price of carbon-free power is much more expensive, especially given the requirement most Northeastern states have that a certain – and growing – percentage of the energy in-state utilities buy has to be carbon-free or low-carbon.

In 2017, a bill was passed that allowed Millstone to compete in the carbon-free market, driving up the cost of the energy they produce. In 2019, a ten-year agreement was reached requiring state energy companies to purchase power from Millstone, guaranteeing that the power station would stay open.  

The 2017 bill and subsequent agreement with Millstone is likely one factor in the higher increase, but the larger issue is the state’s decision to adhere to stringent Renewable Energy Portfolio standards.

This policy decision by state lawmakers has driven up the cost of energy overall, and especially energy from low- or no-carbon sources. Connecticut has also been slow to encourage additional energy-related infrastructure, like gas pipelines and transmission lines. All of these factors have driven up the cost of electricity in Connecticut to one of the highest rates in the continental United States.

Although the Public Utilities Regulatory Authority has suspended Eversource’s latest rate increase pending an investigation, this will likely not the last increase in the cost of electricity for Connecticut residents and businesses as the state continues to pursue its goal of reaching 100 percent renewable energy by 2040.

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(6) Comments

  1. Cynthia

    August 31, 2020 4:02 pm

    Yet another reason I am happy to have gotten out of Connecticut!

  2. Len

    August 9, 2020 5:31 pm

    First the law was SB 9 that was passed on 2018.
    Second, the day-ahead wholesale price of electricity generated by natural gas in May in the region was 1.6 cents per kWh. The price of wind generated electricity in the recent deal with RI was 9.8 cents per kWh, 6 times the cost of natural gas ! The cost for natural gas is historically in the 1 to 5 cents range so the comparison is slightly distorted but there still is a whopping difference and this does not include the huge cost for “backup” facilities that are necessary because of the intermittent nature of wind and solar power.

  3. Tom Scelfo

    August 5, 2020 11:45 pm

    I wish someone would provide FACTS regarding the recent rate increase by Eversource. On one hand, I hear residents claim that their electricity delivery charge suddenly increased $100-150, which seems hard for me to believe. On the other hand, Governor Lamont has said that Eversource had only a 4% rate increase and the rest of the higher price is people using air conditioning in the summer. That also seems hard to believe because so many people are complaining about the increased delivery charge, which Lamont never discussed. I am a big fan of the Yankee Institute, but this article describes an overall trend in electric rates due to CT policies, and does not address any sudden rate increase on July 1. Because I am not an Eversource customer, I can’t look at my electric bill and determine the facts. I would very much appreciate someone providing the truth as to what exactly happened to Eversource electric rates on July 1. Thanks!

    • Bryan

      August 9, 2020 6:30 pm

      I live in northern Connecticut and my bill went from $157 to $238. My delivery fee is DOUBLE my cost of electricity. My mom’s bill went from $350 to $500.

    • Melissa

      August 24, 2020 1:04 pm

      For most people I know, the cost of electricity “delivery” is at least twice, in some cases 3 times that cost of actual use. In my case, my electric usage was $104 but my delivery charge was $183. That’s relatively low compared to friends and neighbors, but that was last month, I can’t imagine what this month will be. My natural gas bill was $23 of usage, but my delivery was $49. My gas bill in the summer is the same, within 1 dollar, of what it was last summer at this time, but my delivery charge is now twice what it was last summer. So I’m paying an additional $25 this year for exactly the same amount of gas I got last year at this time.

  4. John O'Neill

    August 4, 2020 1:10 pm

    Can you give us an indication of the price differential between carbon free energy and fossil energy?

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