Can electricity in Connecticut become more affordable? Energy to be a hot topic in 2025

Electricity bills in Connecticut spiked in the second half of last year, setting off a firestorm of criticism and heightened efforts by the Republican minority in both the state House and Senate to get Connecticut Gov. Ned Lamont to call a special session to address energy costs. Those efforts failed, but with a long legislative session set to start Jan. 8, energy and electric rates are expected to be hot topics in the coming months in Connecticut.

State Rep. Jonathan Steinberg, D-Westport, a co-chairman of the legislature's Energy and Technology Committee, expects "scores of energy bills to be introduced to improve energy affordability."

"It's very easy, very populist to say we're going to reduce your energy bills," Steinberg said. "But there are other equally important issues that need to be addressed." 

Norm Needleman, D-Essex, Steinberg's co-chair, said early in the session, he expects to introduce legislation "that would look at all aspects of energy policy."

"Certainly, we would want to look at such issues as the cost of electricity, the reliability of its delivery of it and how we will seek to continue to meet the state's air quality," he said.

But trying to meet Connecticut's air quality goals may have been dealt a setback on Dec. 20, when Lamont confirmed that Connecticut officials have no plans to move forward with any new wind projects for the time being. Lamont announced plans in October 2023 to join with officials in Rhode Island and Massachusetts to procure new wind power contracts for their respective states.

Needleman said given the dramatic increase in electricity prices last summer,  Lamont did the right thing by having Connecticut sit the first joint procurement round was the right choice and one that he called "a temporary pause." A combination of factors, including one of the hottest summers on record in Connecticut and an increase in the public benefits charge component of Eversource customers, resulted in some customers paying hundreds of dollars more per month than they had before. United Illuminating customers did see their public benefits charge increase from from 1.73 centers per kilowatt hour to 6.18 in July. That was mitigated by a drop in supply rates, so the average residential UI customer saw their bills drop by $1.55 per month.

"Remember, when this joint effort was first announced, the wind (farm) developers that had power projects that were already in the pipeline were canceling them," Needleman said "So when developers re-bid wind projects last year, the prices that came back were substantially higher. So we put a temporary pause on procuring any new wind power."

Affordability

Connecticut Republicans are already positioning themselves as champions of energy affordability.  In a letter sent to Lamont and Connecticut Department of Energy and Environmental Protection Commissioner Katie Dykes on Dec. 27, state Senate Minority Leader Stephen Harding, R-Brookfield and Sen. Ryan Fazio, R-Greenwich, urged greater transparency in moving forward on procuring wind power for the state in the future.

"As we have communicated many times over the past year, we were very worried that any new offshore wind purchase would cost at least four times more than the market rate for power, raising consumer bills significantly in the future," Harding and Fazio's letter said in part. "With high and rising costs, our constituents are more focused than ever on the components of their electric bills. Understanding that the state is directing new purchases for solar and battery storage, we are asking that you commit to releasing the details of these projects - including the pricing - before any contract is finalized that locks in our ratepayers."

Fazio, who is a ranking member of the legislature's Energy and Technology Committee, said Thursday Republican lawmakers will soon introduce an updated version of the party's multi-point energy plan for the legislature to consider during the 2025 session.

"My fellow Republicans and I are going to continue our fight to lower energy costs," Fazio said. "Connecticut has the third highest average electric rates after Hawaii and California. State policies are largely responsible for those rates."

A cornerstone of the Republicans plan to lower electric rates is remove a component of electric customers bills, the public benefits charge, from the oversight of the Connecticut Public Utilities Regulatory Authority and have it overseen by General Assembly as part of the state's overall budget making process.

The public benefits charge is a component on the electric bills of customers of Eversource Energy and The United Illuminating Co. that is designed to pay for more renewable energy sources, a long-term contract to keep the Millstone nuclear power plant in Waterford operating and to pay off the utility debt of customers who couldn't afford their bills during the COVID-19 pandemic.

"These are programs that were mandated by the legislature and most government programs are paid for by the state's General Fund and get reviewed every two years and are subject to public hearings," Fazio said. "The public benefits charges, if they are to be funded at all, should go through that kind of process and get that level of scrutiny."

Another component of the Republican energy plans for 2025, he said, is "to rollback state programs that artificially subsidize or increase energy demand. An example of this, according to Fazio, is the state's plan to expand the number of electric vehicle chargers

Republicans, Fazio said, would also like to see an expansion of the capacity of natural gas pipelines that run through the state of Connecticut. GOP lawmakers also contend that the state's definition of renewable energy is weighted too heavily toward wind power and should be expanded to include hydropower.

Data centers

Another issue that may surface in the 2025 legislative session is the impact that data centers might have on Connecticut's energy needs.

 A 1.2 million square foot data center has been proposed to be built adjacent to the Millstone nuclear power plant in Waterford. Some state lawmakers on both sides of the aisle have expressed concern that such a facility, which operates using large amounts of electricity, would have negative impact on the amount of electricity available to homes and businesses.

Needleman called data center development in Connecticut "a really serious issue that is coming at us like a freight train."

"All signs point to these kinds of projects having unfettered demand," he said. "These are things we have to look at in the context of what it would mean to electric supply and reliability."

Fazio said because of the demand for enhanced computing power in all parts of the economy, data center expansion should be part of the state's economic future, but not at the expense of average citizens.

"They are going to be taking massive amounts of energy off of the grid and that shouldn't be subsidized by the average ratepayer," he said. "There needs to be a level playing field for them; they should not being getting a sweetheart deal."

Steinberg described the amount of energy that data centers use as "tremendous energy sucks," but said they are necessary if Connecticut's economy is going to continue to grow."

"This is a question of adequate energy supply meeting demand and I don't know what is the best way to address it," he said. "Do we try to get our arms around it now or do we wait. And if we wait too long, what is the risk that we lose any control we might have had over it."