On Nov. 17, both Eversource and United Illuminating — Connecticut’s two investor-owned electric utilities — notified state regulators that the price their customers pay for power generation will jump by roughly 50% early next year.
The announcement comes in the wake of two years of uncertainty after Eversource and UI suspended controversial rate hikes in the summer of 2020. That incident led to an investigation by state regulators, a call from U.S. Sen. Richard Blumenthal to consider breaking up the monopoly and, ultimately, a new rate-setting process at the end of 2020.
A small rate decrease followed in 2021, but rates are now on the rise.
The state offers financial assistance to households struggling to pay their energy bills, but only to those below a certain income threshold.
Here’s what you need to know.
Connecticut homes are expensive to heat.
According to data from the Energy Information Administration, Connecticut had the second-highest residential electric bills on average in 2021, only behind Hawaii.
That’s because United Illuminating and Eversource are two of the most expensive investor-owned utilities in the country based on a price per kilowatt-hour basis.
Many of the investor-owned utilities in New England have some of the highest residential electricity prices in the country.
Energy costs are spiking this winter.
United Illuminating, which powers homes and businesses in Bridgeport, New Haven and 15 surrounding towns, said its average power customer would soon need to pay roughly $79 more per month for electricity.
And Eversource, which supplies electricity to customers in Hartford, Stamford, Danbury, New London and 145 other towns, said its average customer would likely need to pay an additional $84 per month due to the rising cost of natural gas and the price of power production in the Northeastern United States.
Eversource and UI don’t control the price of the energy supply.
The prices are set by the owners of regional power generators, which submit offers to sell power. The utilities pass those costs on to consumers without making any profit.
The utilities do make a profit from rates they charge for maintaining their power lines and distribution system in Connecticut.
The companies are taking steps to help mitigate bills this winter.
Eversource and United Illuminating already dedicate a portion of their revenue from service contracts to help provide relief to low- and low-to-moderate-income households.
The companies filed a motion recently with state utility regulators to allow them to front-load that relief. In other words, rather than spread out profits to provide bill assistance over the next year, the funds would be focused primarily to mitigate bills for needy households during the winter months.
Eversource is contributing $10 million toward energy assistance programs outside of LIHEAP.
Three companies affiliated with Avangrid Inc. of Orange — United Illuminating, Connecticut Natural Gas and Southern Connecticut Gas — are splitting equally a $3 million contribution, which is a penalty payment approved recently by state utility regulators stemming from improper wage garnishments and failure to inform some customers about payment options.
Eversource and UI will permanently reduce energy costs for qualifying households …
In 2020, state lawmakers passed a bill that was known as the “Take Back Our Grid” act. That legislation, for the first time, gave the state’s Public Utilities Regulatory Authority the power to develop a special set of electric rates for the lowest-income residents in the state. Earlier this year, the three members of PURA voted to create two new classes of power customers in Connecticut.
Any residential customer who is living at or below 160% of the federal poverty guidelines would see the normal cost of electricity reduced by 50%. That means an individual that takes home less than $21,744 or a family of four earning $44,400 or less would be eligible to cut their power bills in half.
At the same time, any residential power customer that takes home less than 60% of the state’s median income would get a 10% discount on their electric rates. That group would include individuals earning $39,761 or less per year or a family of four earning roughly $76,465 or less annually.
… but not for a couple of years.
Both Eversource and United Illuminating have said they are working to implement the new discounted rates, which were officially approved in October, but the two utilities told PURA that they would be unable to achieve all of the necessary billing and accounting changes for some time.
United Illuminating informed PURA that it could take up to 11 months for the company to fully implement the new rates. And Eversource said it would potentially be 16 months before the lower rates show up on people’s power bills.
As a result, PURA gave both utilities until the beginning of 2024 to sort out the logistics and implement the new rates.
The state offers energy payment assistance to qualifying households.
LIHEAP, the Low-Income Home Energy Assistance Program, helps low-income households in Connecticut pay for home energy costs. It funds the Connecticut Energy Assistance Program, which opened its application period on Sept. 1 for the upcoming winter season.
Households are eligible if they have an income at or below 60% of the state median income. For a family of four, that median income is around $76,400. Those who qualify can receive between $100 to $600 based on income, household size and if that household has a vulnerable member.
CT allocated more funding for that program this year.
The program traditionally is funded with federal grants. Connecticut has received about $94 million from Washington this year and has another $6 million carried over from last year’s budget.
This week, Connecticut committed close to $30 million in additional state funds, if necessary, to bolster LIHEAP. The additional $30 million would be spent only if Congress doesn’t bolster federal resources for LIHEAP between now and January.
Gov. Ned Lamont noted that the $135 million state budget for winter energy assistance would match last year’s level. But energy assistance advocates say that’s far too little and want a LIHEAP budget slightly larger than $200 million.
The funding will help qualifying families get more aid.
Department of Social Services Commissioner Deidre Gifford said the $30 million in state funds that legislators committed last week will translate into more aid, on average, per household.
State officials crafted a distribution plan in late August that offers a basic benefit of $250 to $600 per household, depending on income and other factors.
But families also may qualify for one to three additional “crisis” payments of $430 each to get through the winter.
Gifford said the revised benefit schedule being developed would add an additional crisis payment, though she didn’t mention how much the extra payment would be or how many households might be eligible for it.
Original reporting by Andrew Brown and Keith Phaneuf. Compiled by Gabby DeBenedictis.
CT Mirror Explains is an ongoing effort to distill the Mirror’s wide-ranging reporting on Connecticut topics into a “what you need to know” format.