We’re living through difficult times. Inflation, war in Ukraine, supply chain shortages – the combined impact has led to higher costs across the board, from groceries to gasoline, and hit our pocketbooks hard. Unfortunately, electricity supply is not immune to such cost increases.
With few local energy resources, and being literally situated at the end of the pipeline, New England must import fuels like liquefied natural gas to generate electricity and heat homes. This makes our region particularly vulnerable to the dramatic energy price increases we’ve seen across the globe.
In the late 1990s, the state required by law electric utilities, like United Illuminating (UI), to sell its electric generation plants, in the hopes of creating a marketplace for customers to shop for cheaper electric supply. However, most customers do not shop for electric supply. Now, utilities like UI are required to hold at least four quarterly procurements to procure power for six-month time periods, January through June and July through December, overseen by state regulators, to purchase electric supply for customers. The cost of the energy supply is passed along to our customers, without any markup or profit.
In January, the resulting rates associated with these publicly-overseen procurements, for January through June 2023, will take effect. The supply rate for residential customers will rise by 43%, an average monthly increase of $79 for our average residential customer for January through June, 2023. This electricity supply is provided – and the price determined – by third-party, out-of-state fossil generators. None of the electric supply is generated or owned by UI.
There is considerable misinformation regarding who ultimately bears responsibility for these rising costs, so let me be clear. Electric generator supply costs have risen over 150% over the last three years, enriching out-of-state generators at the expense of Connecticut families. The realization of lower electric supply costs for residents has clearly not materialized: the energy market structure in the state and New England is irrevocably broken.
UI only delivers the electricity you use and does not influence or control the supply price, even though we are required to include and collect the cost in our monthly bills. You will find your supply charges on a separate supplier page of your bill. It is worth noting that UI’s transmission and distribution costs have remained flat for the last six years.
I share Gov. Ned Lamont’s concern about impact of winter energy costs on customers. That is why UI joined with the Governor in November to bring urgent and vital relief for customers, including directing $3 million for direct assistance for electricity and heating costs; accelerating a low-income rate to help our customers most in need; and advancing a bill credit from the Millstone contract to help offset the drastic increase in the energy supply rate.
As the energy supply rates set by out-of-state generation companies take effect in January, we need to continue to examine every solution possible; to work together on additional measures that can immediately lessen the impact of these energy supply prices on Connecticut families; and, in the long run, provide solutions that minimize energy generators’ ability to pass through exorbitant price hikes.
As part of AVANGRID, a national energy company, UI can offer service solutions and plans that have a record of success at other utilities. In the long term, we at UI would welcome the opportunity to discuss empowering utilities to have further control over the price of generation to help mitigate these cost increases.
What we can do right now, in addition to our near-term relief plan, is offer ways for customers to better understand their energy use, and perhaps more effectively manage electricity costs. At uinet.com, you can find free tools for energy management, budget and payment plans for your bills, information on how you can choose a different energy supplier, and information on other sources of assistance. In addition, you can call us at 800-722-5584, Monday through Friday, from 7 a.m. to 7 p.m.
As others traffic in bad faith attacks and misinformation, we are keeping our focus on our highest priority – our customers. Above all, we are here to help. As we implement the near-term relief plan we worked with the Lamont Administration to advance, we remain committed to making sure everyone is aware of the tools available, including payment plans, arrearage management programs, and other resources that can help customers manage their energy use and reduce the impact to their bill.