As Connecticut lawmakers and Eversource executives battle back and forth over rate increases and Eversource’s response to storm Isaias, offshore wind agreements set in place by Connecticut could potentially drive electricity rates even higher in the future. Connecticut in 2019 mandated that Eversource and United Illuminating enter into an agreement ...
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.
The Town of Vernon has sent its own bill to Eversource, demanding $84,000 in reimbursement for costs the town incurred during a nearly-statewide blackout following Tropical Storm Isaias. “The Town of Vernon sustained significant monetary damages directly attributable to Eversource’s lack of preparedness and inability to adequately respond to power ...