For the past few years, Connecticut had the distinction of having the highest electric rates in the continental United States, second only to Hawaii. However, recent data shows Alaska and New York, have overtaken Connecticut.
According to the U.S. Energy Information Administration, Connecticut’s rates fell to 16.15 cents per kilowatt hour in August, putting it behind Hawaii, New York and Alaska.
It will drop even further in January because the Public Utilities Regulatory Authority announced Monday that Connecticut Light & Power’s generation rates will decrease about 1.2 cents per kilowatt hour for residential customers, which means the average customer using 750 kilowatt hours will see their monthly bill decrease about $9.
United Illuminating’s generation rate will also decrease 1.8 cents per kilowatt hour, which means the average residential customer using 750 kilowatt hours will see their monthly bill decrease $13.50 a month.
Similar reductions will be applied to generation rates for business customers taking standard service from the state’s two largest electric utility companies. CL&P business customers will see a reduction of about 1.4 cents/kWh while UI’s business customers will see a reduction of about 1.8 cents/kWh.
The generation rate makes up more than 50 percent of monthly electric bills for residential customers.
PURA is also set to adjust distribution and public benefit charges in December. Both Connecticut Light & Power and United Illuminating have yet to seek rate increases to cover the costs of both Tropical Storm Irene and the October Nor’Easter.
PURA officials noted in a press release that generation charges have steadily declined since 2006 when the cost to generate electricity dramatically increased. They said today’s reductions are attributable to the ability of CL&P and UI to purchase power at lower cost due to the decline in natural gas prices and to a decrease in congestion fees.
Earlier this year, the General Assembly was able to abandon plans to use part of the competitive transmission assessment, CTA, in order to pay off $1 billion in Economic Recovery Notes to help balance the 2011 state budget.
The CTA was a fee Connecticut Light & Power and United Illuminating levied on consumers for 12 years in order to pay them back for getting out of the generation business. The need to retain a portion of that fee to pay of the Economic Recovery Notes, was abandoned by the General Assembly, but not before it collected $40 million from CL&P customers.
Lawmakers abandoned plans to give the money back to ratepayers, despite attempts by Sen. Joseph Markley, R-Southington, to find some way to refund the money. The portion of the assessment the state initially sought to retain was collected from CL&P customers from Jan. 2011 until passage of the state budget in May.