Berlin electric utility Connecticut Light & Power is facing strong opposition in its quest for a $117 million annual rate increase.
Aside from the usual antagonism from government officials, businesses including retail giant Walmart raised red flags last week, arguing the rate proposal is excessive and carefully critiquing several points in CL&P’s request.
CL&P’s demands for higher rates are concerning especially as Connecticut energy costs remain among the highest in the nation. Particularly troublesome is the utility’s desire to increase its return on equity from 9.4 percent to 10.2 percent at a time when the return rate is declining nationally.
We should remember, however, that this is CL&P’s first rate case in four years and market conditions have changed significantly over time. In particular, CL&P shouldered blame for the major 2011 and 2012 power outages, which forced the company to increase spending on infrastructure so that residents and businesses are less likely to see their go out off during powerful storms. Investments in underground wires and enhanced tree trimming were a must and someone has to foot that bill.
Instead, the outcry over CL&P’s rate proposal should focus on New England’s outdated electricity infrastructure and the changes needed to make the state less reliant on supersized utility companies.
The idea of enormous power plants sending electricity via utility transmission lines and distribution systems to far off places needs to be rethought. More and more communities oppose the construction of major power plants in their backyards, and the complex web of transmission and distribution lines breeds the need for a new model.
What Connecticut communities need more of are small power facilities like fuel cells, combined heat and power generators, and solar arrays that can create electricity locally for onsite consumers or nearby microgrids.
Most of the state’s initiatives to install more local generation remain in the pilot or beginning stages, and any business bold enough to try to install onsite generation, and get off the grid, has run into roadblocks thrown up by the old guard: the utilities and the Public Utilities Regulatory Authority, which will determine the fate of CL&P’s rate request proposal.
Developer Bruce Becker four years ago, for example, installed a fuel cell to power his 360 State St. apartment complex in New Haven. Despite the legislature passing a law in his favor, PURA still won’t let him send electricity from the fuel cell to his tenants. Meantime, Orange utility United Illuminating is refusing to pay Becker $3.1 million in Connecticut Energy Efficiency Fund money for improvements he made to the building. Becker has a contract to install a similar fuel cell in his 777 Main St. apartment development in Hartford.
The idea of completely unplugging from the grid remains a radical notion, although that goal is becoming more realistic thanks to new developments in energy technology. The grid still is several generations away from being completely irrelevant, but technological advancements are moving in that direction. For its part, Walmart is trying to install more onsite generation — particularly solar panels and fuel cells — although not enough yet to completely go off the grid.
All the typical players — and some new ones — can continue to jump and scream every time a Connecticut electric utility files for a rate increase. However, once businesses realize they don’t need the CL&P’s of the world anymore, then all this talk of storm recovery costs and return on equity won’t matter.
