“Punishment Fees” Targeted

Saying innovative conservation policy and electric bill hikes are “on a collision course,” State Rep. Lonnie Reed (pictured) announced this week she will introduce legislation to cap fixed-rate charges on electric bills residents receive each month.

“I support legislation to cap the fixed rate because public policy and electric utility management are on a collision course and in dire need of a course correction. That process needs to start now.” The session begins Jan. 7.

The rate hike, recently approved by the Public Utilities Regulatory Authority (PURA) is the latest sign of what Reed says is Connecticut Light & Power’s (CL&P’s) dismal reaction to renewable energy, a reaction she says that is both “frustrating and infuriating.” The utility is the largest in the state.

Reed (D-102nd), co-chair of the Energy and Technology Committee, and a group of other legislators appeared earlier this week at a Capitol press conference, which was sponsored by the CT Roundtable on Climate and Jobs. The Roundtable advocated against the recent rate increase.

At the heart of the conflict is Reed’s belief that the state’s major electric companies, fearful of competition, will do everything possible to undermine new laws aimed at using renewable energy and designed to help the environment and the consumer. 

“The State of Connecticut has worked hard to implement innovative Public Policy that fast tracks conservation and renewable energy technologies—solar, wind, fuel cells, combined heat and power, geothermal and a whole host of other resourceful systems,” she said. 

Renewable Energy Works

“Our public policy is a big success. People are excited about conservation and renewables. They are flocking to participate. Record numbers of business and residential consumers are installing these systems,” Reed added. 

But CL&P, apparently fearing the competition, is digging in its heels, she suggested. 

“CL&P’s response to this new reality is frustrating and infuriating.  Instead of embracing the future and figuring out how to play an important role in moving us all forward, CL&P has chosen to pursue a massive hike in its fixed rate in order to compensate for a reduced demand in electricity consumption,” she said.

At the press conference, Reed took the lead in mounting a counter-attack on CL&P’s decision to seek rate increases, the decision recently approved by PURA.

Consumers using CL& P and United Illuminating will see their fixed rate mount from $16 a month to $19.25 a month. The utility had sought a $25.50 per month increase.

“Punishment Fee”

Reed and a group of legislators said they want legislation to cap fixed fees for CL& P and United Illuminating Co. at $10 a month. The two companies are the state’s largest. A cap of $10 a month would mean $100 million annual shortfall for CL&P, its spokesman said.
The electric company, she said, “is penalizing us all for doing the right thing. This is a Punishment Fee for ratepayers.”

Reed says that CL&P, the largest utility in the state, pursued the fixed rate increase “in order to compensate for a reduced demand in electricity consumption.

“I have been comparing notes with legislators also batting this Punishment Fee in states such as Arizona, Nevada, Utah and Colorado. They tell me consumers are up in arms, and the customers in those states pay far less for electricity than do our consumers in Connecticut.

“What’s more, they say it has a negative impact on the demand for renewables. It makes one wonder if that is the intent.

“If we continue to go along with regular hikes in the fixed monthly service fee, we will set a new standard for incentivizing clean energy and conservation efforts with one hand and punishing them with the other. We cannot move forward to modernize and secure our power system with that approach.

“It is time that we all begin transitioning to a new economic model that values the contributions made by conservation, renewables, micro-grids and other upgrades to the diversity, reliability, environmental compatibility and security of the entire electric system.

“I recommend that a working group be quickly convened involving all of the stakeholders to begin the process reinventing the moribund economic model that is old and tired and infuriating and unsustainable. We need figure out how to incentivize our electric utilities to embrace change, not sabotage it.”

CL&P Responds

Mitch Gross, a spokesman for CL&P, told the Eagle that “capping the fixed rate would negatively affect our ability to do the upgrade work at the high level that is needed and it would result in a rise in variable rates, which are linked directly to how much power is used. “

He also said that there were “significant expenses associated with running a large and complex electric system and it is crucial we are able to recover these costs so we can continue making targeted investments in Connecticut’s electric infrastructure.

“Utilities, like many other service companies, have a combination of fixed and variable rates which are based on how much it costs the company to operate. Capping the fixed rate would negatively affect our ability to do the upgrade work at the high level that is needed and it would result in a rise in variable rates, which are linked directly to how much power is used,” he said.

This bill will engage many in the upcoming session.

“We look forward to working with state leaders on this issue and remain committed to making our system more reliable and efficient for our customers,” Gross said.


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posted by: fk on December 25, 2014  11:14am

We need true deregulation and open competition in this “marketplace” or true regulation and full control.  What we have now is organized crime supported by the state.
Our electric rates are the highest in the nation and UI and CL&P are still asking for more and getting it.  This is a true monopoly and they are strong arming us as only organized crime could do. 
What other product would you buy for $3.00 and pay $30.00 for delivery? 
What other company would be allowed to cut down our trees however they choose to maximize their profits?  What other company has such poor customer service that you spend 20 minutes on hold every time you call? 
Why do UI and CL&P get away with doing business this way?  Because we allow them to.  This needs to stop.

posted by: Winston on December 26, 2014  6:09pm

Representative Reed is correct that the utility companies punish investment in renewable on site generation.  Why do we continue to rely on them to hand out the incentives for renewables when they have such a dismal track record?  In addition to putting a cap on monthly fees, the legislature should give the Green Bank the job of deploying all renewable energy incentives, the way NYSERDA does in New York State.

posted by: Noteworthy on December 29, 2014  8:29am

Cap the base fee and cap the state mandated taxes and fees too. What’s good for the goose is good for the gander..and all that.