Electric Bills to Drop

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Residential electricity rates in Connecticut will be reduced beginning on May 1, a result of a decision taken on Wednesday by the Public Utilities Regulatory Authority (PURA).

At a press conference with Governor Ned Lamont, DEEP Commissioner Katie Dykes said the rate reduction, about 14 percent, is largely due a reversal of the public benefits charge that appears on electric bills, a charge that now becomes “a modest credit.”

The shift was made possible by revenue from contracts negotiated in 2019 to keep the Millstone nuclear power plant running.

Ms. Dykes said rates for Eversource customers will decrease by 4.3 cents per kilowatt hour and by 4.9 cents for those served by United Illuminating. She said the average customer’s monthly bill from Eversource will be $30 lower. Average bills from UI will be $34 lower.

The commissioner said she is “cautiously optimistic” the change to the public benefits charge can continue after an intermediate review in September.

“Let me tell you a little bit about how this happened,” said Governor Lamont.

The 2019 deal with Dominion Energy to keep Millstone open included a ten-year guarantee that Eversource and UI would buy 50 percent of the plant’s electricity for a fixed price, five cents per kilowatt hour.

The deal meant, said the governor, that if the price of electricity is less than the agreed amount “we’ll eat it. If it’s more than that, we get a benefit.”

Mr. Lamont said recent high costs for natural gas have driven up electricity prices, which means the locked-in Millstone rate produced a $250 million benefit for Connecticut ratepayers in 2025 and $200 million so far this year.

“That means we’ve been able to really eliminate the public benefits charge for the foreseeable future, say the next year or so,” he said.

Not “a social program”

State Senator Norm Needleman, chair of the Energy and Technology committee, said there has been a great deal of misinformation about the public benefits charge, especially in terms of where the money goes.

“The mischaracterization of this as a social program was really wrong,” said the senator, noting that it was originally lumped into the delivery charge on bills. Later, he said, it was specified as “an attempt to have a clear indication of what delivery rates really are.”

“A lot of it is energy hedges,” he said, buffers against price volatility. It is also the source of funds for solar, wind and energy efficiency projects.

As Governor Lamont signaled in his Westport talk on April 13, the portion of the public benefits charge that assists those struggling to pay electric bills will now be bonded.

He added that the amount in arrears is significantly lower than its peak during the pandemic, and that the Revolution Wind project, now generating electricity, is expected to save customers a further $100 million annually once it is fully up and running.