Connecticut electricity ratepayers got hit with more bad news this week. On Wednesday, Aug. 14, the Public Utilities Regulatory Authority (PURA) approved a hike in the public benefits portion of electric bills to help Eversource and United Illuminating (UI) recover costs for electric vehicle (EV) charging grid enhancements and rebates, which largely benefited some of the state’s wealthiest towns.
PURA, the state agency that oversees and regulates Connecticut’s utility companies, unilaterally greenlit the EV Charging Program rebates on July 14, 2021, offering incentives ranging from $500 to $250,000 for electric vehicle supply equipment (EVSE) and related electrical upgrades for both private and public use — all without input from lawmakers.
Now the two power companies are looking to recoup $80 million for programs they were mandated to administer.
As part of PURA’s Equitable Modern Grid initiative, the Charging Program — expected to run at least through 2030 — was set up to install electric vehicle charging infrastructure statewide in an effort to develop a “self-sustaining zero emission vehicle market.”
However, an August 1 joint compliance filing by the utilities to PURA included a breakdown of participation by town which revealed that 5,856 residential Eversource customers received rebates, with nearly 30% of those concentrated in just 10 towns. Leading the list are West Hartford with 288 participants, followed by Stamford (268), Westport (226), South Windsor (165), Glastonbury (158), Farmington (136), Norwalk (136), Greenwich (128), Ridgefield (125), and Avon (117).
Less affluent towns like Torrington, Willimantic and Plainfield only had 25, 6 and 3, respectively.
UI, which only covers the greater New Haven and Bridgeport areas, had 683 participants with Fairfield leading with 140 rebates received followed by Trumbull (89), Milford (81), Hamden (74) and New Haven (49). Conversely, Bridgeport recorded just 6 participants, while Ansonia, Derby and Branford had 5, 3 and 2, respectively.
Eversource ratepayers are set to face a 0.3845 cents per kilowatt hour hike, while UI customers will see a slightly larger increase of 0.4592 cents per kilowatt hour. The new rates will kick in on Sept. 1.
It is important to point out this isn’t the first-time ratepayers — many of whom likely don’t own EVs (there are fewer 53,000 registered in the state as of July 1) — are left footing the bill for those who do.
At the June 6th meeting of the Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) Board, it was disclosed that the 2024 Budget Bill included a provision that has Connecticut ratepayers getting stuck with the tab for EV rebates thanks to a move to divert funds from the Regional Greenhouse Gas Initiative (RGGI) to cover these subsidies. Gov. Ned Lamont signed off on the measure on May 30.
RGGI is a cap-and-trade program involving eleven Eastern states, designed to reduce carbon dioxide (CO2) emissions from power plants. Under the program, power plants are required to purchase permits, known as allowances, for each ton of CO2 they emit. These allowances are auctioned off, with the proceeds traditionally funding energy efficiency programs and renewable energy projects.
However, the cost of these allowances is generally passed down to consumers, resulting in higher electricity rates. In other words, residential, commercial and industrial ratepayers end up shouldering this financial burden.
It is estimated by CHEAPR that they will be shelling out between $12-$13 million in incentives this calendar year.
Customers are fed up. This latest announcement follows closely on the heels of a massive increase in the Public Benefits portion of their bills this month. The hike is partly because Eversource and UI were forced to buy power from the Millstone nuclear plant, a move that cost ratepayers $605 million to keep the plant running. Adding to the frustration, Gov. Lamont’s four-year COVID era executive order, which allowed customers to skip paying their electric bills without being shut off, is saddling ratepayers with an additional $140 million burden.
Eversource and UI customers will be stuck paying off this debt for ten months.
In an August 15 Facebook post, Rep. Tammy Nuccio (R-Tolland) shared that she spent several hours with Eversource to dig into the reasons behind the rate hike. She explained that negotiations between the General Assembly, the governor’s office and Millstone’s principal owner, Dominion Resources, Inc., resulted in a mandate requiring Eversource and UI to “buy just about 50% of the power generated by Millstone at a fixed rate of $50 per megawatt hour (MWH) for ten years.”
Rep. Nuccio highlights a couple of key issues: the state locked in a fixed payment rate regardless of market conditions, and neither Eversource nor UI can directly use the nuclear power they are paying for. Instead, they have to sell it on the market.
“In the five years we’ve been in this contract, only one year has actually been ‘profitable’ for Connecticut residents,” writes Rep. Nuccio. She explains that this one profitable year occurred when natural gas prices spiked due to the invasion of Ukraine. “Every other year, [Eversource and UI] are operating at a loss.”
According to Rep. Nuccio, the electric companies approached PURA last year with their $265 million in losses and requested a rate hike to cover the shortfall. PURA rejected the request, telling them to wait a year. However, PURA also requires the companies to project their current year losses. So now, ratepayers are on the hook for last year’s $265 million loss, plus a projected $340 million loss for this year.
One theory suggests that PURA may have kept rates low because they were waiting on passage of climate bills like the “Green Monster,” which were pending in the General Assembly. They knew these bills could push electric bills even higher.
As she campaigns for reelection, Rep. Nuccio is gearing up to introduce legislation next year aimed at reining in PURA’s authority, particularly their ability to issue mandates without legislative input.
Responding to the outcry from constituents, Rep. Jamie Foster (D-Ellington), Vice Chair of the Energy and Technology Committee, submitted a motion on Aug. 14 to reconsider the August rate adjustment, describing the impact on ratepayers as “rate shock.” She cited a state statute that allows PURA to “reverse or modify the final decision, at any time, at the request of any person or on the agency’s own motion.”
If PURA agrees, ratepayers will still be responsible for the costs, but the payments could be delayed or spread out over a longer time.
Meanwhile, on Aug. 9, House and Senate Republicans held a press conference urging Gov. Lamont to convene a special session aimed at reducing electric bills.
They proposed several measures, including using the remaining American Rescue Plan Act (ARPA) funds to offset the public benefits portion of electric bills, prioritizing more affordable renewable energy sources like hydro and nuclear over wind and solar, appointing additional commissioners to PURA, leveraging natural gas to lower winter prices, and capping the procurement rate of renewable energy at two to three times the fair market price.
They followed up with an Aug. 16 letter to the Governor, requesting he convene a meeting of caucus leaders to discuss the call for a special session. They wrote that “there is no reason why we can’t meet to find bipartisan solutions” to address the rising electricity costs.
The public isn’t sitting idly by either. Scott Pearson of Monroe has launched a grassroots campaign urging Gov. Lamont and the General Assembly to eliminate the Public Benefits charge entirely. Pearson started an online petition on July 28 and has already received over 45,000 signatures.
The situation with Connecticut ever increasing electric bills underscores a growing concern about the unchecked power of unelected bureaucrats, a point Yankee Institute has highlighted repeatedly. PURA’s ability to impose sweeping mandates without legislative oversight has left ratepayers footing the bill for policies that disproportionately benefit a select few. As residents grapple with skyrocketing electric bills, it’s clear that Connecticut’s energy policy needs a serious overhaul. Lawmakers and citizens alike are beginning to push back, but the question remains: how much more can the average ratepayer take before we see any relief?
