A majority of customers with the state's two large electric utilities can expect to see significant decreases in electric rates over the second half of this year, according to filings made Wednesday with state utility regulators.
Eversource Energy electricity customers could see their monthly bills decrease by as much as 22 percent starting July 1, company officials said in their filing with Connecticut's Public Utilities Regulatory Authority.
If PURA approves the Eversource's rate filing, the average standard service offer customer for the utility would see their bills decrease by $56 per month over the final six months of this year, said Steve Sullivan, the utility's president of electric operations for Connecticut.
Officials with The United Illuminating Co. estimate that during the second half of this year, its average residential standard service customer with see a monthly bill decrease of approximately $28.
The vast majority of Eversource's electric customers choose the standard service offer, which involves the company purchasing the electricity they use rather than procuring it through a third-party provider. Eversource has 1.28 million electric customers in Connecticut and through the end of April, 72.5 percent of them were standard service customers, according to Mitch Gross, a company spokesman.
Orange-based UI saw the number of customers who get their electricity from third-party providers increase by 5,963 to 64,007, through the end of March. That represented an increase of 1.7 percent when compared to the utility's total customer base of 341,000.
The rates Eversource's standard-offer customers are now paying are 31 percent to 42 percent higher than what they paid in 2022. UI standard-offer customers are paying 28 percent to 38 percent more than in 2022.
Frank Reynolds, UI president and chief executive officer, said energy generation rates that went into effect in January "have been challenging for our customers."
"We are pleased to file this updated Standard Service rate with PURA that will bring lower prices for our customers on the generation portion of their bill over the next six months,” Reynolds said.
While the rate decrease is good news for customers, Sullivan cautioned that the company's savings calculation is based on a customer that uses 700 kilowatt hours per month and typically, usage of electricity increases during the summer.
"Our average customer's usage goes up by about 35 percent during the summer with air conditioners, fans and other appliances working overtime to keep things cool inside," he said. "That’s why we continue to urge everyone to take advantage now of the many energy efficiency and payment programs that we offer – before the hot weather arrives.”
Reynolds said Connecticut and the rest of New England remain at the mercy of "an energy market that faces significant issues."
"The underlying issues that drove this winter’s exorbitant price increases remain unaddressed, and we will continue to call for accountability and reform until the market delivers the stable, affordable pricing and reliability our customers deserve," he said.
Supply cost rising
While Eversource officials have good news about the cost of supplying electricity, the utility's customers will see a slight increase in a line item on the delivery side of their electric bills, starting July 1. The total delivery charge would change from 11.75 cents per kilowatt hour to 14.10 cents per kilowatt-hour, if PURA officials approve the change.
The change in the delivery charge would mean an increase of approximately $16 per month, based on the average customer's usage of 700 kilowatt hour per month. Sullivan said the increase is primarily due to the expiration of a roughly $12 a month credit on customers’ bills that went into effect in January to help offset the increase in energy costs.
"There is portion of customers' bills in which public policy costs are included," he said. "When state officials saw the dramatic increase in electric rates in January, they moved pretty to take some bill credits they had planned to spread out over time and apply them over the first six months of this year. That's what is responsible for the majority of the delivery charge increase."
Even with the increase in delivery charges, Sullivan said rates for that portion of the bill are in line with where they were last summer.
The cost adjustments that UI customers will see in the delivery portion of their bills beginning on July 1 will result in an overall decrease of $28 per month, which is a bill reduction of 11.5 percent.
Adjustments in standard service offer rates occur twice a year, in January and July, and Sullivan said now is "a good time to think about your energy usage and plan for the likely increases we’ll still experience" next winter.
"We think there is a high probability that next winter's will be as high as they were this past winter," he said.
The reason for the dramatic swing in electric rates, according to Sullivan, is tied to how power generators procure natural gas and how it has a dual use in the winter.
"It's really a structural issue," he said. "During the summer, the natural gas that power plants use to produce electricity is more widely available than during the winter. The natural gas that is available in the winter goes first to heating homes and then to fuel power plants."
To make up for the natural gas supplies that go toward home heating oil, Sullivan said power generators turn to using liquefied natural gas, which is in greater demand on the world's energy markets, a factor that drives up the price of the fuel.
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CT electric rates expected to drop drastically starting in July - CT Insider
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