As was the case this time one year ago, the Connecticut legislature is considering sweeping energy legislation, SB 1, that contains the best of intentions but the worst of consequences for Connecticut’s residents and businesses.
While the laudable goals of this legislation are to protect consumers and lower electricity prices, several provisions of this legislation will produce the opposite effect. For this reason, the Retail Energy Supply Association (RESA), of which my company is a member, has proposed amendments to SB 1 to ensure competitive energy suppliers and the nearly 630,000 Connecticut consumers they serve are not negatively impacted by SB 1.
Specifically, SB 1 would shift procurement of electricity by Connecticut’s electric utilities to a solicitation process overseen by the new Department of Energy and Environmental Protection. RESA has proposed amendments to these sections to enable the Department to ensure any procurement is solicited in a transparent manner, by an independent and unbiased entity, which will prevent self-dealing, and allow maximum participation by experts for further review.
Without this amendment, the Department may not have the tools necessary to prevent increases to electricity prices for Connecticut’s residents and businesses. This is because when Connecticut’s electric utilities procure electric supply, Connecticut ratepayers will be required to assume the costs and risks of new electric generation development and supply purchase that comes with such procurement as opposed to private investors under the current procurement system. We believe such a result is both unfair and costly to Connecticut consumers. We urge the Legislature to not put ratepayers at risk of higher bills, which is what will happen under SB 1 as currently drafted.
In addition, RESA recommends section 36 of the current legislation be amended so as not to place restrictions on Connecticut businesses and their access to competitive suppliers as well as the lowest possible price. RESA’s proposed amendment will maintain the bill’s consumer protections for residential customers and individual small businesses, without putting unnecessary restrictions on larger businesses. The amendment merely seeks to strike a balance between residential and business consumer needs and address them accordingly.
Given that nearly 630,000 Connecticut residents are shopping in the competitive market and mitigating energy costs by doing so, it seems hardly fair to now limit their access to this market and make them responsible for underwriting the cost of new generation through old school procurement practices that have failed in the past. Absent amendment of SB 1 in its current state, the legislature should reject this bill and instead foster the competition and innovation that gives Connecticut residents and businesses their best chance to lower their energy costs.
Jay L. Kooper is the immediate past President of the Retail Energy Supply Association, a national trade association of 21 competitive energy marketers with operations nationwide.
