CT lawmakers claim they can cut your power bill by 40%. Will it work?
A new proposal would eliminate the Public Benefits Charge from customers' bills for three years and changes the way Connecticut buys wholesale electricity. But critics are skeptical about the plan.
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Democrats and Republicans can’t agree on much these days. But they agree that Connecticut’s electric rates are too high.
Now, a bipartisan coalition claims they can cut customers’ bills up to 40%.
But critics – including Gov. Ned Lamont –worry that the proposal could backfire.
“CHARGING TOO MUCH”
Connecticut has the third highest electric bills in the nation.
“They’re charging too much,” said Elaine Levy, of Norwalk. “I don’t know what they charge per kilowatt. I have no idea.”
The reasons are long and complicated. But at the state Capitol, lawmakers from both parties are scrambling to find immediate relief before the legislative session ends in June.
“Fix the electric bill crisis,” said state Rep. Joe Polletta (R-Watertown). “Single parents trying to raise a family cannot afford these bills every single month – three, four, five hundred dollars. Something needs to change.”
UP TO 40% SAVINGS?
On Wednesday, a bipartisan group of lawmakers proposed sweeping changes that could immediately lower power bills by 20%, and eventually up to 40%.
The bill removes Public Benefits Charge from bills for three years and shifts the cost to state bonding. The fee pays for energy efficiency and a variety of other programs.
“[Customers say] ’I don’t want to pay this Public Benefits Charge. That’s not fair,’” Jess Cain, Eversource’s Vice President for Customer Operations and Assistance Programs, told lawmakers. “And they’re pissed that they’re paying for customers’ unpaid bills.”
Supporters estimate that the proposal could save customers $500 a year. But to pay for it, Connecticut would have to borrow $800 million a year in new “green bonds.”
“It spreads those costs over many years,” said state Sen. John Fonfara (D-Hartford). “We did that with respect to teacher retirement; we did that with respect to state retirement.”
Lawmakers also want to change the way Connecticut buys wholesale electricity.
Right now, it’s similar to home heating oil. Utilities lock in a price every six months, which is subject to state regulatory approval. But under the new proposal, a new quasi-public Connecticut Electricity Procurement Authority (CEPA) could buy electricity whenever it's cheap.
“It’s like you go to the store and buy peaches for three dollars a pound in the middle of winter,” Fonfara said. “You don’t, but that's what we’re doing.”
LOTS OF SKEPTICISM
Critics are worried that CEPA would have no oversight. And they’re skeptical about whether it could actually lower bills.
“I spent 10 years trading commodity markets. It's very, very difficult to do profitably,” said state Sen. Ryan Fazio (R-Greenwich). “And the few people in the entire world who could it do very profitably and beat the markets – buy things cheaper than regular people can on the competitive marketplace – are extraordinarily rich.”
Lamont is also wary.
“Few examples exist, if at all, of states that have successfully introduced separate procurement authorities, let alone ones that operate outside of mechanisms designed to protect ratepayers and that can be done without saddling ratepayers with hundreds of millions of dollars more in expenses,” Lamont spokesman Rob Blanchard said. “Rather than putting annual expenses on our ‘credit card’ or crowding out bonding for municipal parks, roads, and school construction with items in the public benefits charge, as proposed, the Governor would prefer we explore ways to reduce PB charges that may be outdated or unnecessary.”
Environmentalists told lawmakers that removing the Public Benefits Charge could actually cost customers more money.
“It does contain the very programs in it that save people money,” said Lori Brown with the Connecticut League of Conservation Voters. “The energy efficiency, clean energy type programs.”
WHAT’S NEXT?
Lawmakers held a public hearing on SB1560 on Wednesday. Democrats are also crafting SB4, another proposal to lower energy costs, but that bill contains few details yet.
The General Assembly sessions ends on June 4.
