Early Wednesday morning, the Connecticut legislature passed a sweeping energy bill with the laudable goal of lowering electricity prices in Connecticut. The measures adopted in the bill, however, are much more likely to push prices up than to drive them down.
These measures include the creation of a new state energy and technology authority (which could require billions of dollars to properly capitalize), allowing utilities to take greater risks in the procurement of power, and spending billions of dollars on sources of electricity that produce power that is many times more expensive than even today’s high utility prices.
The purported benefits of the bill – most prominently the goal of reducing electricity rates by 15 percent by July 1, 2012 – exist only in theory; the costs will be paid by Connecticut residents and businesses in cold, hard cash.
The current energy debate occurs against the backdrop of the emergence of a thriving competitive market where hundreds of thousands of customers have chosen to obtain a variety of products and services from competitive suppliers, saving millions of dollars in the process.
In addition, the growing competitive industry today employs thousands of Connecticut residents, even in a time where there is little economic growth in the state.
However, the energy legislation now sitting before Gov. M. Jodi Rell increases electricity prices for Connecticut’s residents and businesses by requiring them to assume the costs and risks of new electric generation development and supply procurement, plus the costs for investing in new solar infrastructure, making Connecticut more reliant on solar energy at a time when it is one of the most expensive sources of energy.
Indeed, according to Department of Public Utility Control and Office of Policy and Management estimates, ratepayers could see increased costs of $80 million annually rising to $207 million annually if the residential solar programs are implemented without cost containment.
In addressing the state’s high electricity prices we encourage the government to emulate the medical profession: first do no harm. The energy bill takes the opposite approach, spending money the state doesn’t have now in the vain hope of future savings.
This would be a dangerous gamble even in the absence of the state’s already high prices and challenging budget situation. With those fiscal realities, the energy bill is a serious threat to the state’s economic health and we urge Governor Rell to veto it.
Jay L. Kooper is the President of the Retail Energy Supply Association, a national trade association of 13 competitive energy marketers with operations nationwide.