Too High

by Melinda Tuhus | December 19, 2006 8:19 AM | | Comments (4)

jake.JPGOn the eve of a fateful state regulatory meeting, several dozen protesters rallied outside the Church Street headquarters of the United Illuminating Company to decry the company’s announced gigantic rate hike, which climbed in short order from 38 percent to 45 percent to 50 percent for residential customers. Jake Weinstein was up on stilts over it.

Marie Notarino, a widow and retired social worker from Branford, was among the demonstrators Monday afternoon. She has been educating herself on why the drastic increases are coming now. “It’s about investors buying the old generating plants, and they’re setting the rates,” she said. Under deregulation ten years ago, electric utilities had to sell off their generating capacity and become just distributors of energy. To hear more of her statement, click here.

marie.JPGNotarino (pictured) said her UI bill is currently about $135, “and I keep my lights off and my furnace down. I don’t know what else I can do.” Notarino, who lives on a fixed income, is looking at a $65-$70 per month increase that she doesn’t have in her budget.

The state Department of Public Utility Control (DPUC) is scheduled to vote on UI’s proposed increase at a meeting Tuesday.

UI spokeswoman Anita Steeves said the underlying cause for the hike is the need to earn more revenue to pay suppliers, since the cost of energy has tripled since the company last signed contracts. But Attorney General Richard Blumenthal wasn’t buying that. While acknowledging that most of the increase is going to electricity generators, not electricity distributors such as UI, he said that UI is over-earning, and should be paying customers a refund, not raising it rates. Click here to listen to his argument. Steeves said there are already sharing mechanisms in place if utilities end the year with a larger profit than allowed by law, but she didn’t say that it was in the form of a refund to customers.

Electricity providers say another contributor to rising costs is congestion in the power grid, resulting in federal fees. Deregulation “” carried out in about half the states “” was supposed to lower costs, but it hasn’t worked out that way, and that’s made a lot of people angry, as they confront ever-rising energy bills in a state that already has some of the highest electricity costs in the country.

frank.JPGFrank Panzarella (pictured), a New Havener who helped organize the protest, said common folk “” i.e., UI’s customers “” must stand up if they want to see things change. The root of the problem, he thinks, is the state’s lack of an energy policy. Click heref or his proposed solution. And click here
to listen to a creative chant and here
for song lyrics.

Blumenthal said he’ll be arguing before the Department of Public Utility Control on Tuesday that it should defer the increases for at least three months to allow the legislature to take action on the issue. Steeves, who insists the residential increase is “only” 44.7 percent, not 50 percent, says the company has requested permission to phase in the increases over several months, in order to lessen the shock to consumers, but not to reduce the rate hike itself.







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Comments

Posted by: JW | December 19, 2006 10:36 AM

Why can't we get to choose electric companies, just as we do phone companies? My phone bill's the lowest it's ever been in my entire life!

Posted by: catherine audet | December 19, 2006 10:19 PM

Where are the voices of our state politicians in the UI rate hike matter, "the voice of the people" How is UI getting away with this? What are UI's profits for this year? This is an outrageous price hike which will hit both business and residential customers very hard.

Posted by: Cedar Hill Resident | December 20, 2006 10:40 AM

Ok as I sit back and watch this disaster unfold.....I am angry!! "They" meaning the gods of Hartford knew this was going to happen... they knew and did nothing!! Then what.... they send out this last min. letter and plea to stop it till they can see if there is another way :0 Please, do we look that dumb?? I may not know a lot but I think that the higher ups knew a long time before this that it was going to happen and that the UI was not going to be able to stop it because they have no choice. Please now they are going to have some kind of meeting to see if they can help the people of the state Come on....this is all a big smoke screen to save face. They knew it...screwed up and like every other politician they are going to play the blame game until we forget or get use to it. Conn is in a WHOLE LOT OF TROUBLE!! Lets all say good-by to our local businesses and any chances of new ones coming in. Lets all get use to sitting in the dark and eating more pasta. This state is dieing. RIP CT

Posted by: Bruce | December 20, 2006 4:47 PM

There is no competition because the legislation forced the monopolies to continue providing power at the "standard offer" rate -- 10% below 1996 rates. This rate is so low that several companies who have tried to become energy providers have gone belly up because they can't offer rates that cheap.

The real shock here is not the fact that prices are going up. A barrel of oil costs about 3X what it cost in 1996. The shock is the sudden rate at which prices are going up. If we had an open market with plenty of competition, prices would be continually adjusting up or down, but not all at once. Given a pool of consumers with the power to choose, these providers would be forced to keep balance their profit margins with their rates. Maybe our rates wouldn't be lower than they were in 1996, but at least we wouldn't get slammed all at one time.

Deregulation has a lot of potential, but not the way it is currently structured. Our legislation puts off action year after year and this big blast is the more the result of procrastination than anything else. UI is not a greedy person -- it is a corporation and it is always going to be pushing for the highest possible profit margin, that is unavoidable. What they really need is competition to keep them in check.

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