Legislation promising modest relief on CT electric bills clears Senate

Connecticut lawmakers revealed the long-awaited final draft of their plan to cut residents’ electric bills on Monday, before moving quickly to advance the measure through the frenzy of the legislature’s final week in session.

The legislation, Senate Bill 4 , is expected to save utility customers between $325 million and $350 million annually over each of the next two years, according to proponents. Those numbers amount to about 1 to 2 cents per kilowatt-hour off current electric rates, potentially adding up to a $100 or more a year for many customers.

State Sen. Norm Needleman, D-Essex, who serves as co-chair of the Energy and Technology Committee, called it, “one of the most significant things we’ve done,” in the last six years of attempting to address the state’s infamously high electricity prices.

“We put money back in people’s pockets, took a hard look — and much as many of my colleagues think we can do better, I dare them to try without screwing up the system,” he added.

In addition to providing direct relief for ratepayers, the bill would make myriad changes to energy policy in Connecticut such as promoting grid-enhancing technologies, lowering subsidies for solar and other renewable energy sources, and offering utilities more flexibility in how they purchase power for their customers.

Over the long term, Needleman said, those changes will help contain costs that are passed along to residents through their electric bills.

The Senate’s bipartisan, 34-1 vote late Monday advanced the bill to the House, where lawmakers now have just two days to agree to the legislation and send it to Gov. Ned Lamont’s desk before this year’s legislative session closes Wednesday.

“I’m glad to report that Democratic and Republican legislators and my office have made significant progress on legislation to reduce electric rates, which among other things eliminates some of the public benefits from consumers’ bills,” Lamont said in an X post Monday morning. “I encourage the legislature to approve this.”

Over the two weeks preceding Monday’s vote, lawmakers held a series of closed-door meetings with members of Lamont’s administration, utility representatives and other key stakeholders to hammer out the final details in the 134-page bill.

Throughout this year’s legislative session, Republicans have pushed for even bigger savings by removing the entirety of the public benefits charge from customers’ bills and paying for those programs out of the state’s budget.

But the cost of doing so — roughly $1 billion each year — would have forced the state to cut spending in other areas, Democrats argued.

“Not one of us should walk out of this chamber today even close to believing that we resolved this problem,” said Senate Minority Leader Stephen Harding, R-Brookfield. “The public benefits charge still exists, it’s still too high and our electric rates are still too high.”

The two biggest sources of savings in the final draft of the bill will be paid for through borrowing to cover the costs of public benefits programs and other charges that appear on customers’ bills.

The bill authorizes up to $125 million a year in general obligation bonds — to be paid back by taxpayers — to cover the costs of unpaid bills accumulated during the COVID-19 pandemic, along with an additional $50 million over two years for the rollout of electric vehicle charging infrastructure.

An additional $135 million in estimated savings comes from the use of rate-reduction bonds to pay for storm costs and the installation of advanced metering technology. Those bonds would be paid back by utility customers through the public benefits charge, but over a longer period of time and at lower interest rates than under the current law.

The final pot of savings, about $100 million, will result from the variety of other changes to existing policies the bill makes, including removing wood-burning biomass facilities from the top tier of the state’s renewable energy portfolio.

Haggling over details

One particularly troublesome point in lawmakers’ negotiations hinged on language in the bill describing the administrative practices and makeup of the Public Utilities Regulatory Authority, the state agency that oversees and approves utility rates.

Republicans argued that an earlier draft of the legislation would have given more authority to the authority’s chairperson, Marissa Gillett, to issue rulings on procedural and other intermediate matters without the explicit backing of her fellow commissioners.

Those powers are currently subject to a lawsuit brought by both of the state’s utilities, who have accused Gillett of issuing hundreds of unilateral rulings in cases before regulators. Both Gillet and PURA have disputed those charges.

House Minority Leader Vincent Candelora, R-North Branford, had demanded Democrats remove the controversial language from the bill in order to get the blessing of Republicans, who have the ability to talk bills to death as time runs out in the legislative session. When the latest draft of the bill was released Monday morning, the section had been amended to address most of Republicans’ concerns — save for a single sentence clarifying that Gillett served as the “administrative head” of PURA.

“Now we’re back to this circular fight: does this mean she can just assign cases to herself?” Candelora said.

By Monday evening, however, the language had been changed again to refer to to the chair as the “chief executive” of PURA, ending Candelora’s opposition.

A spokesperson for PURA was not immediately available for comment following the bill’s passage around 8:30 p.m.

In a statement, United Illuminating spokeswoman Sarah Wall Fliotsos praised the passage of the legislation, which she said followed years of lobbying by utilities to address costs.

“It is gratifying to see that legislators have at last turned to these challenges by introducing new funding mechanisms for the Public Benefits Charge and new procurement strategies for energy supply, both of which could help stabilize cost for customers,” Fliotsos said. “New policies to increase the stability and predictability of the state’s regulatory environment can also put Connecticut on the right track to enable the investment and grid modernization in the electric grid that our customers sorely need. There remains more work to be done, but we look forward to working with our customers and the state to implement these new measures.”

A spokeswoman for Eversource said the company would reserve comment until final passage of the bill.

In addition to the debate over the authority’s administrative practices, lawmakers have also pushed Lamont to fill a pair of vacancies that have existed on PURA’s board since it was expanded to five members in 2019.

Earlier this year, the governor appeared to have reached a deal with lawmakers to appoint two people — state Sen. John Fonfara, D-Hartford, and former state Rep. Holly Cheeseman, R-East Lyme — in exchange for Gillett’s renomination to another four-year term. That deal fell apart , however, over the complexities involved with appointing a sitting lawmaker and Fonfara’s past business dealings before PURA.

As part of their negotiations over S.B. 4, both Candelora and House Speaker Matt Ritter, D-Hartford, said Monday that they’d reached a “handshake” agreement with Lamont to fill the two vacant positions before the start of next year’s legislative session.

No names were announced as part of the purported deal, which was confirmed by Lamont’s office.

Fonfara was the only member of the Senate to vote against the bill on Monday, which he described as missed opportunity to take more systematic changes, particularly around energy procurement.

“We think because ‘Oh we’re at the end of the pipeline,’ we think because costs are always higher in Connecticut or in New England, that this is our fate,” Fonfara said. “It should not be our fate, we can do better.”

Nixed plans

Amid a flurry of late changes made to the bill in recent days was the removal of a proposal to borrow an additional $750 million over five years to pay for energy efficiency programs that are currently funded as part of the public benefits charge .

While the plan would have removed those costs from customers’ electric bills, opposition emerged this week from environmental advocates and some business owners who argued that a reliance on borrowing — which must be approved by lawmakers — would destabilize the state’s energy efficiency industry.

More than 44,000 people in Connecticut are employed in HVAC, electrical, weatherization and solar jobs that are funded by investments in energy efficiency, according to a report published by the utilities in March.

“It is very tough for us as business owners to shut the doors, and they reopen if  funding is not available,” said Edgardo Mejias, the owner of Energy Efficiency Solutions. “We cannot grow our businesses, we cannot offer services we provide to the individuals we serve.”

An earlier proposal in the bill would have also shortened Connecticut’s winter shutoff moratorium by one month and removed shutoff protections for people with certain medical conditions. Instead, those protections would have only been made available to people who can’t afford to pay their winter heating bills.

While proponents argued the changes would have saved additional millions of dollars while cutting down on fraud, opposition from groups such as the American Association of Retired Persons resulted in those provisions being stripped from the bill.

Another controversial proposal to implement time-of-use electric rates — which advocates argued would be harder to adopt by older people and those with medical needs — was referred to PURA to come up with a workable system.

“I don’t like the bill, but some of the areas we fought to improve are improved to a certain degree,” said John Erlingheuser, a lobbyist for AARP’s Connecticut chapter.

Connecticut had the third highest cost of electricity of any state in May, according to data collected PowerOutage.us, with an average residential bill of $187. Every other state in New England made it into the top 10 states by cost of electricity.

Electric rates did drop slightly in May following PURA’s most recent decision to adjust the cost of the public benefits and transmission charges. Customers are likely to see an additional drop in July , due to lower supply rates that have been put forward by both of the major utilities.

However, the start of summer is also when many Connecticut residents begin to rely on air conditioning to cool their homes and businesses, driving up usage — and, with it, the cost of their electric bills.