Gov. Ned Lamont said Friday he has scheduled a vote next week by the State Bond Commission on $155 million in borrowing to deliver the modest and temporary electric-rate relief authorized last month by the General Assembly.
Based on early estimates from the industry and governor’s office, most consumers could see savings between $4 and $10 based on usage and other factors in the monthly bills beginning in September.
The borrowing is an element of the omnibus Senate Bill 4 energy legislation passed with overwhelming support last month. It would offset a portion of the public benefits charge in monthly bills.
The public benefits charge is a levy on ratepayers for programs that, among other things, provide financial assistance for low-income customers and encourage energy efficiency and renewable energy initiatives.
It also contributes to the cost of providing a stable rate for the carbon-free power generated by the Millstone nuclear plant. The cost of generating power is largely set by a competitive market dominated by natural gas-fired plants, which currently is cheaper than nuclear.
“Using state bond funding as a means of reducing public benefits charges is one action we can take to provide some savings on consumers’ electric bills, but I must stress that this is only one step in the effort to make energy rates more affordable and we need to do more to address the actual costs of generating and delivering electricity,” Lamont said in a statement.
Connecticut and other northeastern states, which sit at the end of natural gas pipelines, have the highest electric rates in the continental U.S. Since the deregulation of power generation, state regulators and the two major utilities have limited control over rates.
Regulators set the portion of the bill covering the distribution of electricity to homes and businesses, which includes the costs of maintaining and modernizing the infrastructure owned by Eversource and United Illuminating.
The high cost of electricity, the reliability of its generation and delivery, the adequacy of supply and the oversight by state regulators all have been elements of legislative and administration efforts toward reforms since 2020.
Subsidizing the public benefits charges comes as other factors are driving down costs, notably reductions in supply rates of 13% for Eversource and 14% for United Illumination, effective July 1. Rate adjustments approved in May by the Public Utilities Regulatory Authority also cut the public benefits charge.
Of the $155 million in bonding to be approved by the Bond Commission on Aug. 1, $125 million will reduce costs associated with hardship programs for low-income customers and $30 million will be used to reduce the costs associated with the electric vehicle charging program.
Another round of state borrowing expected in 2026 would enable the savings to continue into at least the first several months of 2027, the governor’s office said.
Republicans initially had sought a much more expansive and energy package that would have cost roughly $1 billion a year to eliminate the public benefits charge entirely. But the votes for SB 4 were nearly unanimous: 144-3 in the House, and 34-1 in the Senate.
In a statement issued quickly after Lamont’s announcement Friday, Senate Republicans said gutting the public benefits charge remains their goal: “Merely reducing the hidden public benefits tax is not nearly enough. Republicans will continue pushing to totally eliminate those public benefits charges from electric bills.”
Lamont noted the bipartisan support for SB 4 and promised efforts to lower prices will continue: “I am encouraged that we can continue this cooperative effort and develop policies that will produce additional savings for consumers.”
