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Connecticut Electric Rates to Decrease Slightly Following Regulatory Approval

Connecticut’s Public Utilities Regulatory Authority (PURA) has given the green light for a modest reduction in electric rates for the upcoming year. This decision comes as a relief to many residents, as it stems from more favorable purchasing conditions for power derived from two nuclear facilities in New England.

The unanimous vote from all three PURA commissioners will result in an estimated decrease of approximately $13 in monthly bills for the average Eversource customer and around $3 for typical United Illuminating users. It’s important to note that the precise amount customers will save will vary based on individual usage patterns and the classification of their rates.

These new rates are slated to go into effect on May 1 and will remain in place for up to one year, unless further adjustments are made by PURA in September.

The rate adjustments are part of PURA’s annual review process focusing on the transmission and public benefits segments of electric bills. While the supply and distribution rates—which constitute the majority of electricity costs—remain largely unchanged, this adjustment represents a significant moment for the state’s utility landscape.

Claire Coleman, who leads the Office of Consumer Counsel, highlighted the decision as a balanced approach amid the energy market’s volatility that has persisted over the last year. “This decision reflects OCC’s advocacy to consider both affordability as well as protecting customers from the impacts of market volatility and arrives at the best possible outcome,” Coleman remarked. She underscored the ongoing nature of these market fluctuations, promising continued efforts to stabilize rates for Connecticut consumers.

The primary driver behind this reduction can be traced to changes in the pricing of power purchase agreements from New Hampshire’s Seabrook Station and Connecticut’s Millstone Nuclear Power Station. Utilities purchase power from these sources, and the expenses incurred are typically passed onto consumers through a public benefits charge. The Millstone agreement, in particular, has faced scrutiny, especially after it contributed to substantial electric bill increases last summer during a heatwave that heightened electricity demand.

Interestingly, when the wholesale price of electricity exceeds the predetermined rates set in these contracts, utilities can offload excess energy back to the grid, generating profits that benefit customers. Recent developments in the early part of the year allowed for just such an occurrence, resulting in a decrease in the public benefits charge.

Earlier this year, Eversource filed for a significant $275 million return to its customers based on these agreements. While PURA initially proposed a more conservative return of $45 million, a final resolution settled on $142 million—a figure that acknowledges both the utility’s request and the potential risks involved in such forecasts.

Eversource’s spokeswoman, Jamie Ratliff, emphasized the importance of this decision in providing time-sensitive relief to customers as energy consumption typically surges during the summer months.

PURA has clarified that Eversource’s request initially relied on overly optimistic predictions regarding wholesale energy pricing trends. The authority cautioned that basing future rate structures on speculative forecasts would unduly place financial burdens on customers if market conditions shift unfavorably.

Moreover, PURA denied a separate request from Eversource to levy an additional $75 million charge on customers to replenish their storm reserve accounts, reacting to concerns about the justification behind such costs.

For United Illuminating, this rate adjustment translates to a loss of approximately $10.3 million in overall revenues, creating a context in which both utilities are navigating financial impacts from these regulatory decisions.

The PURA’s decision arrives at a crucial moment marked by intense scrutiny of the agency and its leadership, particularly its chairwoman, Marissa Gillett. Recently, state lawmakers confirmed Gillett and her fellow commissioner, David Arconti, following an extended confirmation period that highlighted the authority’s role amid rising electricity rates in the state.

Amid calls from various political factions to address Connecticut’s high electricity costs, discussions have centered on the public benefits charge—a composite of programs funded through utility bills that some legislators propose should be borne by the state’s general fund instead. Moreover, state Senator John Fonfara has introduced a proposal to borrow up to $2.4 billion over the next three years to cover the costs associated with the public benefits charge, signaling an evolving legislative landscape around energy pricing.

This ongoing conversation will likely shape the future of energy policy and pricing in Connecticut as legislators, consumers, and regulators navigate the complexities of the energy market amidst fluctuating economic pressures.

This article originally appeared on CT Mirror.

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