Gov. Ned Lamont and other high-ranking state officials are warning Connecticut residents of an expected spike in energy prices this winter, as consumer demand for power, heightened by the economic recovery from COVID-19, quickly outpaces production levels.
In a lengthy statement, the governor’s office attributed the apparent shortage to a number of factors, some outside of direct human control, such as the pandemic and severe storms, and others — including allocation of resources by energy companies — well within it.
“During the pandemic, worldwide demand for natural gas and oil declined as the economy slowed, and producers returned money to shareholders after years of losses, rather than invest in new production,” the statement read. “Labor and supply chain shortages, plus weather disruptions like Hurricane Ida, have also hampered production. Demand has now returned, faster than expected, and production is not keeping pace, leading to price increases. Severe weather could make matters worse, by driving up demand for natural gas, which in turn could compromise the reliability of the region’s electricity grid.”
According to state officials, standard service generation supply rates for residential customers of the state’s two electric distribution companies, Eversource Energy and the United Illuminating Co., will be increasing from historic lows of 7.08 cents/kWh at Eversource and 8.01 cents/kWh at UI during the latter half of 2021 to 11.165 cents/kWh at Eversource and 10.67 cents/kWh at UI for the first half of 2022.
Customers who use natural gas may see rates go up in the range of 10 to 20%, they added, and home heating oil customers can expect an increase of 40% above last year and a 15% increase over the average of the last five years.
Eversource had released a similar warning last week, encouraging customers to take steps to reduce their own energy consumption and take advantage of the company’s financial relief programs, including plans that allow residents to pay their past-due bills in installments.
Lamont and others in his administration highlighted measures they said would help insulate Connecticut households from price volatility. Those include federal replenishment of the Connecticut Energy Assistance Program, efforts to reform the region’s natural gas-dependent power grid and expanded utility bill assistance available through UniteCT.
There is also a moratorium in heating source shut-offs for eligible households between Nov. 1 and May 1.
Marissa P. Gillett, chair of the Public Utilities Regulatory Authority, said the agency is urging customers to contact their utility and inquire about relief and protection programs they may be eligible for.
