Energy Reform Legislation May Prove Too Costly For Connecticut Consumers

May 11, 2010

The General Assembly spent many of the last, precious hours of the 2010 session debating and, finally, passing legislation its supporters hope will lower electric bills in Connecticut. Unfortunately, there is reason to fear that this new initiative will have precisely the opposite effect. That is why I voted against it.

As I see it, our newly adopted energy reform initiative could very well end up hurting the same people it is meant to help: Connecticut residents and businesses that need relief from high electricity bills. Keep in mind that this new initiative is the most comprehensive energy reform legislation passed by the General Assembly since it voted to deregulate the electricity market in 1998. Connecticut is just starting to see some benefit from the original deregulation legislation – and it is folly to pass new, complex, legislation now that could lead to unintended, unwelcome, consequences.

Among other things, this new legislation creates the framework for a new, potentially expensive, state bureaucracy. It restructures and expands the staff of the state Department of Public Utility Control (DPUC) to create a new super-agency, the Connecticut Energy and Technology Authority, charged with buying electricity and conducting energy related research. The primary goal of the bill is to reduce energy costs in Connecticut. To that end, the legislation requires that the cost of energy drop by 15 percent in July of 2012, and hold steady at the lower price for five years. Failure to meet that ambitious goal would open the door to the possibility of state-owned generation.

Furthermore, this new legislation calls for the DPUC to look into the possibility of withdrawing Connecticut from ISO-New England, which is responsible for overseeing power generation and transmission for New England, as well as overseeing administration of the region’s wholesale electricity markets, and regional planning.

Certain provisions of this far-reaching bill seem potentially promising, at least at first glance. Those include: allowing municipalities to create a bonding program for renewable energy; requiring suppliers to offer time of use rates to their customers; allowing electric distribution companies to procure power, though not limiting how much they can buy; calling for an extensive new solar energy installation program in addition to the programs already in existence; creating a fuel cell pilot program to install units in some state buildings; implementing a strict code of conduct for electric brokers who sign up customers for competitive electric suppliers; requiring at least 3% of money Energy Conservation and Management Board takes in to be spent in under-served communities; and allowing DPUC to investigate implementing a low income energy rate to be paid for by cutting funding to other programs for low income consumers.

There is no question that we have to confront the fact that Connecticut’s electricity costs are among the highest in the nation. At some point, it may make sense for the General Assembly to pass new energy legislation. However, the issues involved are much too complex – and the stakes much too high – to craft and pass such a complex bill during the last hectic days of the session.

I, along with other legislators, plan to closely monitor the effects of this new energy reform legislation – and work in a bipartisan manner to respond quickly at any signs that this new initiative is hurting, instead, of helping, us. Meanwhile, I urge you to contact me with your concerns and questions, and to share your ideas about what the General Assembly should be doing to address Connecticut’s energy needs. I can be reached at my legislative office in Hartford at 1-800-842-1421 or via e-mail to [email protected].