Lawmakers promise action over dramatic power bill increases, but options are limited

State and federal lawmakers are promising changes after Connecticut’s two major power companies announced dramatic price increases. But their options may be limited.
Eversource and United Illuminating bills could jump by half in January. On Thursday, both filed for substantial hikes in the supply charge most customers pay. According to rate filings, the average Eversource bill could increase $84 each month. UI bills could go up an average of $79.
The supply charge is how much the utilities pay for electricity; they aren’t allowed to profit from it. Still, power customers are already talking about cutting back.

"Tell the kids to turn down the heat, and the rooms that we're not utilizing turn it off in those areas,” said Jenn Bouchard, of Westport.

Politicians react

Gov. Ned Lamont and state lawmakers blasted the price hike, but they're powerless to stop it. That's because Connecticut deregulated the electricity market in 1998. Eversource and UI sold off their generating facilities, so now they have to buy power on the open market. The law also stripped the Public Utilities Regulatory Authority of the right to set supply charges.
“PURA does not ‘approve’ the rates,” the agency said in a statement. “PURA’s role is limited to ensuring that Eversource and UI conducted competitive procurements for the electricity and that both companies are passing through no more and no less than the actual costs of that electricity supply.”
The top Republican in the state Senate said it might be time to give PURA more power.

"Something has to give,” said state Sen. Kevin Kelly (R-Stratford). "Everything needs to be on the table because of the substantial increases in energy costs."
Deregulation promised lower electricity rates. That never materialized, but the co-chair of the legislature’s Energy and Technology Committee said it may be too late to reverse the law.
"To turn around and tell Eversource and United Illuminating to buy every power plant in the state and we have a vertical utility – I'm not sure that's in the cards,” said state Sen. Norm Needleman (D-Essex). "There may be a way to figure out how to put some guardrails on this thing, and that's what I'm hoping for – where we don't find ourselves another year from now in this situation.”

Why such a big increase?


So why is this big price hike so high? More than half of Connecticut’s electricity comes from natural gas, and the war in Ukraine has caused a global shortage. Natural gas is even more expensive in New England because it must be shipped here on a boat. No natural gas pipelines run into the region.
The federal government could ease prices by waiving the Jones Act, a 1920 law that prevents foreign ships from delivering liquefied natural gas to American ports.

"If that was loosened, I think that we could actually see a little bit of relief in prices, just so that we would have extra access to supply,” said Chris Herb, the Connecticut Energy Marketers Association president.
Sen. Richard Blumenthal said it’s one option the Biden administration could consider.
"The Jones Act is very contentious, and I think there are steps we can take, whatever we do about the Jones Act, that will lower the cost of energy,” Blumenthal said.

Blumenthal also said Congress should investigate potential price gouging among electricity generators and regional power grids.

What’s next?

Longer-term, Connecticut is moving away from fossil fuels. The state is investing in offshore wind power, but that's still several years away.
In the immediate future, state lawmakers are expected to add $33 million to state’s Low Income Home Energy Assistance Program during a special session right after Thanksgiving.