rate hikes

Power Bill Breakdown: What Exactly Are You Paying For?

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As Connecticut electric customers have dealt with some of the highest bills ever, lawmakers have been taking a closer look at line items in them to squeeze out any savings.

So just what are those charges everyone has been paying, and how realistic is it some can be cut?

For starters, your power bill covers supply and delivery.

Connecticut electric supply rates doubled this winter, according to Connecticut’s Office of Consumer Counsel.

Mark Hemenway of Barkhamsted told us, “It's outrageous.”

Courtney Morse of West Hartford said she has been “…just watching my spending and trying to budget more for higher electricity.”

Eversource and United illuminating, the main power companies serving Connecticut, do not profit from electricity they supply you with -- that charge strictly covers the cost of generating the power.

Plus, you can shop for a supplier with better rates. Here's more information from the Public Utilities Regulatory Authority about the process.

The delivery side of the bill has at least six charges - the costs subject to state or federal review and regulation.

  1. There’s a transmission charge that pays for high-voltage equipment
  2. A distribution charge for customer service
  3. A distribution charge for things like poles, wires and transformers 
  4. And an adjustment covering under and-overpayments

There are also two public policy charges:

  1. The FMCC delivery charge supports energy efficiencies and renewables
  2. A second public benefits charge involves electric bill assistance

There are two other charges only on the Eversource bill, not UI:

A system improvement charge, which supports grid modernization and resiliency. There’s also something called CTA, which charges or credits customers in connection with deregulation.

Legislation may phase out the Eversource system improvement charge - about a 3% savings for its customers.

State Senator Tony Hwang said he wants to remove what he calls the “camouflaged costs” out of customer bills that don’t involve electric supply or delivery.

He has advocated putting public policy charges for energy efficiency and assistance into the state budget instead - something that could reduce electric bills by 5% or more.

“Take away the fringe benefit cost that they're doing, quote unquote, for the benefit of the consumer, when they don't fully always benefit from it, make it a transparent legislative process,” Hwang said.

Senator Norman Needleman, co-chair of the legislature’s energy and technology committee, said he disagrees.

“I think that any year, any item that you see that we spend would be subject to the whims of the budget in a given year. And I think that's a terrible way to set public policy,” Needleman said.

He explained that over the past four years, the committee has worked to make Eversource and UI more accountable for what they charge.

Current legislation has aimed to make utility shareholders pay for items including certain lobbying and marketing costs, plus legal fees in rate-setting cases. Right now, you the customer pays for that.

And going forward, a utility’s performance, when it comes to storm responses and other events, will be factored into rates.

Those moves may help with energy bills a small amount in the short term, Needleman said, but more importantly, he believes it will level the playing field in future rate cases.

“What we do is we create a regulatory framework where the ratepayers en masse get a better deal,” Needleman said.

Commenting on this potential legislation, Eversource issued the following statement:

“We have serious concerns about how this bill will impact not only our customers, but our overall ability to provide safe and reliable service across Connecticut. Prohibiting specific cost recovery through state law could have unquantifiable unintended consequences. We will continue to work with policymakers on ways to provide affordable, clean and reliable service to customers during this period of high rates and costs related to supply."

UI said, in part, the bill, “includes several unhelpful provisions, out of compliance with the constitution, directed at Connecticut’s utility companies.”

"Regarding Senate Bill 966, the General Assembly has been clear that the drastic spikes in energy supply costs Connecticut families are enduring this winter are unacceptable, and UI wholeheartedly agrees on the critical need to take action to protect customers from these unprecedented cost increases. However, S.B. 966 does not address these problems. Instead, it includes several unhelpful provisions, out of compliance with the constitution, directed at Connecticut’s utility companies. Most importantly, S.B. 966 does not address the absence of transparency into the costs set by out-of-state generation companies, or the broken energy market in New England that is failing to deliver cost-effective pricing for customers or support a reliable power grid.

Instead, the bill advances damaging provisions such as restricting settlements. Notably, Connecticut Attorney General Tong has specifically opposed this provision. Restricting settlements stifles creativity, collaboration, and administrative efficiency. Additionally, numerous provisions within the bill are unconstitutional, and disallows costs without consideration for whether the utility acted prudently incurring those costs, or whether it was directed by PURA to incur those costs."

Needleman said there’s a good chance supply rates for Eversource and UI will drop the next time rates are set.

He explained the war in Ukraine caused a huge temporary spike in the price of natural gas - the fuel source for most power plants. 

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