Energy regulators from Connecticut and Massachusetts will hold a technical meeting Tuesday to compare notes on the energy procurement processes that led to a steep jump in electricity rates that went into effect this week.
Connecticut’s Public Utilities Regulatory Authority and its counterpart agency in Massachusetts are scheduled to conduct a virtual hearing beginning at 10 a.m. to investigate how Eversource Energy purchased electricity in the two states and New Hampshire.
The hearing was set in motion in November when the Senate Democratic Caucus wrote to PURA following news that customers of both Eversource and United Illuminating would see their energy bills rise by around 50% at the beginning of the new year.
“This is not a problem that Connecticut alone can solve,” the letter signed by 20 Senate Democrats read. “We do not live in a vacuum, and this crisis requires a regional solution. Connecticut must work with Massachusetts and New Hampshire, the other states in which Eversource operates. Together we can hold Eversource accountable as our ratepayers demand.”
In an interview Monday, Sen. Norm Needleman, an Essex Democrat who co-chairs the legislature’s Energy and Technology Committee, said the hearing should provide regulators with insight into the dynamics of the energy-purchasing market on which the rising generation rates are based.
Needleman also hoped the event would help illuminate for the public the complicated market in which providers like Eversource and UI purchase energy at shifting prices based on the conditions of factors like natural gas and oil supplies.
“There were not a lot of bidders on the standard service rate and that created a volatility and when there’s not a lot people bidding on the standard service, the risk premium goes up and people who trade energy make a lot of money or lose a lot of money,” he said.
Needleman said he and other policymakers would be considering ways to prevent future disruptions like the conditions that resulted in this month’s rate hikes, while also balancing priorities like mitigating climate change and strengthening the grid on which the system relies.
“I’m going to keep using my overly simplistic three-legged stool analogy,” Needleman said. “Reliability, cost and climate change mitigation: they all have to be thought of whenever we enact laws here. I think we’ve done that quite well here but Connecticut is a small state. We’re not an island and it’s my job as chair of the committee to think about all of these at the same time and not just one of them.”
