Ratepayers, UI Blast “Hidden Tax”
by Melinda Tuhus | Sep 9, 2010 8:43 am
Posted to: Business/ Economic Development
New Havener Wendy Hamilton spoke out against a “hidden tax” on her electricity bill mandated by the General Assembly to reduce the state’s budget deficit. A United Illuminating executive agreed with her.
That concurrence was unusual. Hamilton is a member of Fight the Hike, an organization founded to oppose rate hikes requested by UI and the state’s other electric utility, CL&P. She testified at a public meeting Tuesday night in the Hall of Records called by the Connecticut Department of Public Utility Control to allow ratepayers to weigh in on the tax.
The fee goes toward state bonds floated to reduce the state government budget deficit.
Only a dozen people showed up, and about half of them let DPUC Commission Chairman Kevin DelGobbo know they oppose the fee, as well as another change that reduces the funding available to make homes and businesses more energy efficient.
First, a UI representative, Michael Coretto, made a PowerPoint presentation about the intricacies of the changes mandated by Sections 126 and 134 of the law, which introduce or extend certain charges while reducing or eliminating others. The bottom line is that charges will keep appearing on electric bills until 2018 that were scheduled to expire five years sooner—totaling $650 million or about six dollars a month for a typical customer.
Hamilton (pictured above, with Coretto) began by reminding listeners that Connecticut has the highest electric utility rates in the continental U.S. (Only Hawaii’s are higher.)
“It’s a state budget tax and I don’t know who thought of sticking it on our utility bill,” she said, “but the utilities ... it’s no skin off their nose, they’re already overcharging us. But I feel like I’m being double-dipped in terms of my state tax.”
Hamilton and several other speakers said the charges hit some ratepayers who are desperate to make ends meet in the recession. Click here to read the docket.
Jamie Howland of Environment Northeast (on the left, pictured with activist Aaron Goode) spoke out specifically against the one-third cut in efficiency funds that the law also mandated.
“It takes 35 percent of the energy efficiency fund for eight years, which is ratepayer money; it’s supposed to benefit ratepayers through efficiency programs,” he said. “Energy efficiency is one of the most significant things people can do to control their energy bills, and this will reduce people’s access to energy efficiency programs that help them do that.”
At the end of the hearing, someone asked Coretto what UI’s position on the changes was.
“We opposed the bill,” he said. Speaking after the hearing ended, he explained UI’s opposition was two-fold. One refers to the Competitive Transition Assessment (CTA) charge that was scheduled to expire in December 2013 for UI customers. “When the CTA otherwise would have gone away in 2013, another charge [for the Economic Recovery Revenue Bonds, or ERRB] will replace it—not as big, but the bill will not go down as much as it should have.”
And he reiterated Howland’s opposition to cutting by a third the Conservation and Load Management (i.e., energy efficiency) Fund, which he said has a track record of reducing energy use and thereby saving ratepayers money. “We will not be able to provide some of those services,” he said.
Commissioner DelGobbo (pictured) began the hearing by stating that the DPUC has little discretion to make changes, since the utilities were mandated by the General Assembly to add the charges. “But we are open to any and all suggestions,” he added.
After the hearing, he explained that the DPUC will conduct another hearing on Sept. 14 in Waterbury, then consider all the comments and issue a final ruling—what he called “a financing order”— by Oct. 1. “At that point the parameters are locked in, [but] the [state] treasurer will not issue the bonds until the end of the year or early next year. That gives the legislature the opportunity, in theory, to mitigate the impacts” on UI and CL&P ratepayers. He said possible options include restoring money for the efficiency fund, spreading the charge more broadly among all ratepayers, not just those with UI and CL&P, and using any future surpluses to pay off the bonds earlier than scheduled. He said he would support “any and all” changes that would reduce the burden on ratepayers.
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This tax will hit UI payers first and then CLP payers next. It is an unholy tax fueled by the CT legislature’s inablity to control spending and make the tough decisions they are paid to make. Cowards all.
But it all started with this illustrious group of bad actors: Note all the local celebs who came up with this half baked plan.