Eversource Energy and United Illuminating are asking to more than double their electricity supply rates next year, a move that would add $85 to the average residential Eversource customer’s monthly bill, due to a spike in the price of natural gas.
Natural gas fuels more than half of Connecticut’s total electricity net generation.
The utilities filed requests to increase their standard service supply rates with the Public Utilities Regulatory Authority on Thursday for the first half of 2023.
The new rates run from Jan. 1, 2023 to June 20, 2023. In Connecticut, the energy supply price changes twice a year – Jan. 1 and July 1.
PURA does not have the authority to reject or modify standard service rates, and there will not be a hearing or a vote. The authority’s review of the utilities’ applications is administrative and will include confirming they have provided the required data.
If approved, Eversource supply rates would increase from 12.1 cents per kWh to 24.2 cents per kWh, costing the average residential customer who uses 700 kWh of power each month by $85 – a 48% rise.
The company’s standard service rate was 11.5 cents per kWh last year.
United Illuminating supply rates will go from 10.6 cents per kWh to 22.5 cents per kWh, resulting in a $79 increase for the average user.
The utilities’ filings with PURA immediately drew criticism from state officials.
“This is a massive increase that will be unaffordable for many Connecticut families and businesses,” Attorney General William Tong said. “We pay far too much for our energy in Connecticut as it is, and these winter rates are nothing short of punishing.”
Distribution rates are dictated by strict costs to utility companies, which fluctuate based on the wholesale price of electricity. PURA’s review will include determining that the companies are not tacking on a profit margin to the rate.
Tong said his office has intervened on every rate case before the Public Utilities Regulatory Authority and the Federal Energy Regulatory Commission, but it does not have much ability to challenge supply rates.
Tong said there is a global spike in the price of natural gas due to the war in Ukraine, as Russia has reduced shipments of natural gas, causing stress on markets.
“Both as a country and a state, we need to take a hard look at our energy sources and reduce our reliance on sources like natural gas that produce these wild, unaffordable surges in rates,” Tong said.
State Consumer Counsel Claire Coleman said the higher supply prices will impact consumers’ ability to afford their electricity bills. Coleman said she will work with state and federal leaders to obtain more energy assistance for residents this winter.
“This is a result of a global energy crisis that warrants an all-of-government response,” Coleman said.
Earlier this month, President and CEO of Eversource Energy Joe Nolan wrote a letter to U.S. President Joe Biden asking for the administration’s help to prevent a natural gas shortfall this winter.
ISO-New England, which operates the region’s power grid, has warned of the possibility of rolling blackouts, saying the region will not have sufficient natural gas to meet power supply needs for the region in the event of a severe cold spell.
