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As Eversource, UI propose big rate hike, CT regulators and lawmakers say they can't do much about it

A resident walks nearby after a fire broke out on the gas pipeline and the surrounding area in the Saltivskyi District after it was hit by Russian shelling on March 25, 2022 in Kharkiv, Ukraine. More than half of Kharkiv’s 1.4 million people have fled the city since Russia’s large-scale invasion on February 24, which was followed by weeks of intense bombardment. Russian forces remain to the city’s north and east, but have met heavy resistance from Ukrainian troops here.
Oleg Pereverzev
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Getty Images Europe
A resident walks nearby after a fire broke out on the gas pipeline and the surrounding area in the Saltivskyi District after it was hit by Russian shelling on March 25, 2022, in Kharkiv, Ukraine. More than half of Kharkiv’s 1.4 million people have fled the city since Russia’s large-scale invasion on Feb. 24, which was followed by weeks of intense bombardment. The war in Ukraine has had a big impact on energy prices..

Connecticut’s two biggest electric utilities requested a massive rate increase Thursday. The proposal could raise the average electric bill for residential customers of Eversource and United Illuminating by about $80 each month and would take effect Jan. 1.

The eye-popping requests from Eversource and UI come as the state heads into winter and immediately set off a flurry of responses from consumer advocates and politicians.

Democratic Gov. Ned Lamont said Eversource and UI were “enjoying historic profits” while “customers are experiencing economic hardships” and called on both utilities to find “long-term solutions that untether us from the volatility of global fossil fuel markets.”

But any long-term solution won’t solve the more immediate problem: how to reduce a massive rate request fueled by skyrocketing global energy costs, which state law essentially allows utilities to pass directly along to customers.

That reality was raised by the Public Utilities Regulatory Authority (PURA) in an emailed statement Thursday evening.

“PURA’s role is limited to ensuring that Eversource (and UI) conducted competitive procurements for the electricity and that both companies are passing through no more and no less than the actual costs of that electricity supply,” the agency said.

In other words, PURA doesn’t have much leeway in reducing the rate request.

“PURA’s review is largely administrative in nature at this stage,” the agency said.

The agency said Connecticut’s decision to deregulate energy markets more than two decades ago made it so “PURA does not have the authority to reject or modify the standard service rates.”

It was a sentiment echoed by the utilities Thursday evening.

“The Standard Service price is the cost of energy used by ratepayers, and purchased by UI on their behalf without any markup or profit. This is a pass-through cost,” UI spokesperson Craig Gilvarg said in an email.

Eversource said in a statement: “As has been widely reported, energy costs continue to rise globally, with regional electric supply prices reaching all-time highs this year due to increased global demand for and the high cost of natural gas, world events, extreme weather, and other issues.”

PURA said it will check to ensure that both Eversource and UI weren’t tacking on any additional profit margins to the rate.

Connecticut Attorney General William Tong said the state and the U.S. need to take a “hard look” at energy sources to reduce reliance on sources like natural gas “that produce these wild, unaffordable surges in rates.”

“We have next to no ability to challenge these supply rates, which is frustrating,” Tong said in a statement. “Our supply rates always fluctuate between winter and summer, but this is not normal. We are seeing a huge global spike in gas costs due to the war in Ukraine and Russian manipulation of gas supplies.”

‘Unwelcome news’

Lamont said he will soon call for a special legislative session, saying he wants to ensure energy assistance programs are funded “to at least last year’s level” to help people struggling with electricity and heating oil costs.

But he acknowledged the terrible timing of the possible price hike.

“This is unwelcome news to close out a year that has been challenging for so many in our state,” Lamont said.

Republican leaders took a harsher tone.

“As Connecticut grows more unaffordable, more must be done to provide relief to help our families. This comes as no surprise because Democrats’ policies have already made Connecticut one of the most unaffordable states to live in with some of the highest energy costs in the country. This increase is ridiculous,” Senate Republican Leader Kevin Kelly (R-Stratford) said in a statement.

“Today’s record increases in the generation of electric rates proposed by Eversource and United Illuminating show just how flawed our energy markets are, and how those flaws are harming Connecticut households,” state Sen. Norm Needleman (D-Essex), co-chair of the Energy & Technology Committee, said in a statement.

“In the 23 years since our state deregulated its energy markets, we are at a point where control of our energy costs is out of our hands and we are now responding to decisions made by Wall Street energy traders and global energy providers.”

Both Eversource and UI are encouraging customers to reach out about available financial assistanceand payment plans.

Connecticut Public Radio’s Matt Dwyer contributed to this report.

Note: Gregory B. Butler, who is an executive with Eversource Energy, is a member of Connecticut Public's Board of Trustees.

Patrick Skahill is a reporter and digital editor at Connecticut Public. Prior to becoming a reporter, he was the founding producer of Connecticut Public Radio's The Colin McEnroe Show, which began in 2009. Patrick's reporting has appeared on NPR's Morning Edition, Here & Now, and All Things Considered. He has also reported for the Marketplace Morning Report. He can be reached at pskahill@ctpublic.org.