Latest news with #JohnFonfara
Yahoo
26-05-2025
- Business
- Yahoo
CT energy fight takes circuitous route. At risk is lower electric bills, any relief for ratepayers
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.
Yahoo
28-04-2025
- Business
- Yahoo
Connecticut bill aims to cut electric costs, but may stifle clean energy
Connecticut lawmakers are touting newly introduced legislation as a way to lower out-of-control power bills, but opponents say it could devastate the state's renewable energy progress. Provisions of the complex, 80-page bill would scale back incentives for residential solar and make nuclear power eligible to earn renewable energy credits, directing essential funds away from other types of clean energy developments. 'It's a direct attack on the growth of solar and wind in Connecticut, an attack on new resources that reduce pollution,' said Chris Phelps, state director of advocacy group Environment Connecticut. Connecticut's high electricity rates — its residential prices were the second highest in the country in February — have been the subject of much discussion among lawmakers this session. Many of these conversations have, explicitly or implicitly, revolved around the largely unfounded notion taking root across New England that clean energy programs are driving high prices. That belief is the basis of some provisions in SB 1560, a sprawling piece of legislation introduced earlier this month by Democratic Sen. John Fonfara, chair of the Finance, Revenue, and Bonding Committee. Fonfara, who announced his plan accompanied by legislators from both sides of the aisle, claims the bill would create immediate savings for Connecticut consumers. At a hearing for the bill in mid-April, dozens of people and organizations testified, some in support of the lower costs the bill promises, many opposed to the dangers they say it poses to renewable energy. The proposed legislation includes several sections that do not explicitly address clean energy. It calls for the creation of an in-state procurement authority to watch the power markets and, ideally, buy electricity at better prices. The bill would also eliminate the sales tax on electricity purchased by commercial and industrial users, and mandate an expansion of variable time-of-use rates, which nudge households to use less energy during high-demand times by raising the price of electricity. Renewable energy advocates, however, are focused on three elements they claim would completely undermine state support for clean energy and energy-efficiency programs without creating any overall savings for the public. The first measure that worries advocates is a small wording change that would define existing nuclear power generation in the state — a category that includes only the Millstone Power Station — as a Class I renewable energy source. This designation would allow Millstone to sell renewable energy credits (RECs) as part of the state's renewable portfolio standard. Under the standard, utilities must buy RECs to offset a certain percentage of the power they sell. That proportion rises over time: This year, for example, Connecticut utilities must procure enough renewable energy to meet 30% of their power sales; next year, that bar jumps to 32%. By encouraging a market for renewable energy, this requirement lowers the emissions from Connecticut's power supply. Plus, renewable energy developers can use revenue from selling RECs to finance new projects. If Millstone were allowed to sell Class I RECs, it could do so at much lower prices than other clean energy sources because the nuclear plant is already built and running without this added financial support, said Francis Pullaro, president of renewable energy nonprofit RENEW Northeast. A flood of cheap credits from Millstone would lower the market price for RECs across the board. While utilities could pass those savings on to customers, advocates warn that REC prices would almost certainly drop so much that they no longer provide enough revenue to renewable energy developers to support new projects. There would also be little need for solar or wind RECs in the market if Millstone were allowed to sell credits. In 2023, the plant generated 33% of the power consumed in Connecticut, while utilities only needed to meet 26% of their total energy sales with renewable energy. This dynamic could imperil existing renewable energy operations that count on REC revenue, and prevent new projects from penciling out, Pullaro said. The effect would be to render the renewable portfolio standard essentially meaningless, he said. 'By doing this you're effectively repealing the [renewable portfolio standard] because it's no longer going to be available to incentivize new developments,' he said. '[The nuclear plant is] already built and doesn't need RPS revenue. You won't have any renewable resource able to compete with that.' Another major issue advocates have flagged in the bill is a proposed change to how homeowners with solar panels are compensated when their systems generate extra power that flows onto the grid, a process called net metering. The legislation would allow homeowners to receive credit only for the supply of excess power they generate, and not for the costs of distribution or transmission, which are currently part of the compensation calculations. The rationale for this change stems from a concern that customers without solar will find themselves footing the bill for compensating households with solar. The new rule would make rooftop solar 'unrealistic' for most homeowners, Phelps said, but wouldn't make much of a difference for everybody else. There is just far too little solar deployed in Connecticut to create the kind of cost shift the bill is trying to avoid, advocates said. In 2024, just over 4% of the electricity consumed in the state was solar, according to the Solar Energy Industries Association. 'We in Connecticut have relatively little solar compared to other New England states,' said Bernard Pelletier, vice president of People's Action for Clean Energy, a statewide advocacy group. 'This would just make us have less.' The third area of concern for advocates is the bill's proposal to eliminate the public benefits charge from customers' power bills. That's a fee that helps pay for energy-efficiency programs, a state clean energy fund, assistance to low-income customers, mandated nuclear power purchases, and other energy-related public policy programs. The legislation would create a Green Bond Fund that would borrow money to pay these costs, removing them from monthly bills and spreading out the financial impact over the bond repayment period. Many advocates, however, worry that this approach would result in less certain funding for the energy-efficiency and clean energy programs currently supported by the public benefits charge. As outlined in the legislation, the bond fund would be able to spend up to $800 million annually, yet the expenses for programs included in the public benefits charge were $868 million in 2023 and $1 billion in 2024. The bond fund 'would be unlikely to consistently cover the costs of these programs, and it is unclear how and when decisions would be made regarding funding levels for each program,' Katie Dykes, the state's commissioner of energy and environmental protection, said in testimony filed with the legislature. The Finance, Revenue, and Bonding Committee voted favorably on the bill last week, and it is now expected to go to the Energy and Technology Committee for further consideration and likely amendment. When that happens, Phelps hopes legislators leave behind the portions that could undermine renewable energy progress. 'While I appreciate the rhetorical support for clean energy, the policy details of this bill would really take a huge step backwards,' he said.
