CT energy fight takes circuitous route. At risk is lower electric bills, any relief for ratepayers

Yahoo

26-05-2025

A year after record heat drove up electric bills and touched off ratepayer protests, legislators are racing against an end-of-session deadline to deliver relief.
With less than two weeks remaining before the legislature closes shop, what has emerged is long, complex and evolving draft legislation that would cut consumer costs modestly in the short term while attempting to control some future costs by tweaking the way the state's highly regulated utilities operate.
Political and industry analysts said the evolving legislation — as it stood last week — could save customers 5 percent on electric bills.
While the projected savings are not inconsequential, there have been other proposals with greater projected savings.
An energy package introduced in April by Sen. John Fonfara, a Hartford Democrat, promised to lower bills 25 percent or more. It fell to legislative rivalries and opposition from environmentalists. But some of its most significant proposals were preserved — watered down in some cases — and transferred to the pending draft legislation.
Minority Republicans have called for deeper cuts by removing what are known as public benefits from customer bills. The state bills about $1 billion a year in public benefit costs to electric customers, using utility bills as a hidden tax to cover costs of state programs such as those that promote energy efficiency, subsidize new clean energy generation and pay the electric bills of low income or medically disabled utility customers.
Sen. Ryan Fazio, a Greenwich Republican, said his caucus was pushing late last week for draft language that would eliminate as much as $200 million in state-mandated public benefits.
Fazio said there is bipartisan support for a compromise that would cut consumer electric bills, describing the work as the 'most important' the legislature will do this year.
'The measure of success will be whether we can get meaningful savings for taxpayers and ratepayers, which I believe we will,' Fazio said.
One of the draft proposals borrowed from Fonfara's bill permits the state and its two electric utilities to borrow nearly $3 billion to cover costs running from decarbonization programs to storm damage by issuing long-term, low-interest government bonds. Customers and taxpayers would still be stuck with the costs, but bonding means smaller incremental payments over a far longer period.
As it stood last week, the plan uses the state government bonds to cover the cost of $580 million of public benefits costs — $150 million for energy conservation programs, $300 million to pay the bills of those unable to do so and $80 million for an incentive program to promote installation of electric vehicle charging stations.
Those costs would disappear from electric bills but resurface as taxes.
The draft also authorizes the issuance of up to $2.2 billion in what would be called rate reduction bonds.
Those bonds pay for the $1 billion it has cost Eversource since 2018 to repair storm damage. Utilities customarily recover storm damage costs from customers over six years or so. With rate reduction bonding, the expense would remain on customer bills, but could shrink as much as $3 a month by stretching payments out for as many as 15 years.
Rate reduction bonds also would finance the $800 million it is projected to cost to install high-tech electric meters, known as AMI, primarily in the homes of Eversource customers, another cost that was to have been billed to customers over a relatively short term.
In addition to notifying utilities of outages, so-called programmable smart meters help customers save money by informing them to use off peak hours when it is cheaper to operate high-energy appliances.
The draft legislation expands on off-peak usage by requiring Eversource and United Illuminating to establish a variable rate system and pricing scheme that creates an incentive to use appliances during periods of low electricity demand. It requires the utilities 'to design a comprehensive customer education and engagement program to inform customers of the benefits of time-varying rates.'
Legislative staff and lawmakers, aides to Gov. Ned Lamont, officials across the state energy bureaucracy and the electric utilities have been shaping the draft legislation for weeks. They are expected to finish this week.
If it is held up, a culprit is likely to be the session-long disagreement over the operation of the Public Utility Regulatory Authority. Under the leadership of Chairman Marissa Gillett, PURA has been in an increasingly bitter fight with the utilities. Eversource and United Illuminating claim in a lawsuit that PURA has shown an anti-utility bias under Gillett, who they say has pushed aside fellow commissioners in order to issue unilateral — and therefore illegal — decisions. The result, the utilities claim, has been erosion of their financial conditions and repeated reductions in their credit ratings.
PURA denies any irregularities and has said the utilities are complaining about being held to account for their spending and earnings.
The fight about a once-obscure state agency spilled into the legislature, which opened its current session with promises to address the state's second highest in the nation electric rates.
The body was paralyzed when an 11th hour deal was needed to confirm Lamont's nomination of Gillett to a second term. Among her loudest supporters are Sen. Norm Needleman, D-Essex, and Rep. Jonathan Steinberg, D-Westport, co-chairmen of the Energy and Technology committee. Among her critics are Fonfara, a legislative expert on energy and utility questions, and House Republican Leader Vincent Candelora of North Branford, who has been given an unusually strong voice in the energy legislation by the House Democratic majority.
The deal to preserve Gillett's confirmation involved appointing Fonfara, a former Energy and Technology chairman, to an expanded PURA. Gillett and Needleman fought Fonfara's appointment, which was eventually abandoned. Needleman later worked to block Fonfara's energy bill, parts of which are contained in the draft legislation that, normally, should have been produced by Needleman's committee.
Candelora has proposed language in the draft that addresses the question of unilateral decision making by Gillett with a law requiring all commissioners to vote on significant matters. Candelora wants the votes recorded and made available for public review, something all other government bodies are required to do under open government law.
When Candelora's proposal was reduced to draft form and sent to PURA for review by the House speaker's office, the version that came back replaced Candelora's language with a version that supported PURA in its fight with the utilities. Someone also, at some point, inserted a sentence in the 126-page draft legislation that would have retroactively undermined the joint Eversource and United Illuminating suit accusing PURA of illegal decision making, according to people involved in the process.
Speaker Matt Ritter, a Hartford Democrat, said that Candlelora's language will be reinserted in the legislation and that a final version will not move forward without Candelora's support.
'Look at it this way,' Ritter said. 'I'm not calling the bill unless Vinnie is voting for it. I'm sorry. I will amend it and send it back down if Vinnie is not happy about it. I have been very very clear about that.'
There is also expected to be opposition from conservation and environmental groups that oppose changes to public benefits that would require favored programs to compete for money at the legislature with all government programs. About 70,000 people have signed a petition demanding that the public benefits be removed from utility bills.
Public benefits probably won't be at much risk under a draft proposal that requires the state Department of Energy and Environmental Protection to lead a year-long study of the scores of line items the legislature has added to public benefits over more than a dozen years. Among other things DEEP is required under the study requirement to determine the purpose of each line item, how it was authorized and who it benefits.
Another study required by the draft would examine a proposal from Fonfara's earlier bill to establish a more aggressive means by which the state contracts for the power that Eversource and United Illuminating distribute. Under the current procurement model, the state participates in about a half dozen pre-scheduled energy auctions a year. The study will examine possible savings from a system in which professional energy traders would search markets continuously for favorable price fluctuations.
The bill also proposes some savings through changes in the way medical and financial hardship cases receive assistance on electric bills.
It also would increase the amount of energy purchased from Dominion Energy's Millstone Nuclear Power station in Waterford, presumably at a savings, and orders advance planning for the construction of a new nuclear plant, as well as planning for offshore wind and geothermal energy energy projects.