Sen. Harding, CT GOP Push to Eliminate “hidden tax” from Electric Bills

Growing frustrations

2017 Millstone deal is driving the high public benefits charge on electric bills

By Christopher Keating

Hartford Courant front page

High electric bills have generated a storm of complaints from frustrated Connecticut businesses and homeowners but the public benefits portion of consumers’ bills is the source of the most anger. That fee isn’t a charge for electricity ratepayers have used, but for promises legislators made years ago.

The public benefits charge is separate from the supply costs that spiked in July. A blistering month of heat and high humidity led to major use of air conditioners and the highest monthly electricity usage of the year for many homeowners.

“We used more electricity in July than we ever have before in the history of July,” Gov. Ned Lamont told reporters in his Capitol office.

But it’s the public benefits charge — being paid over 10 months to cover a deal with the Millstone nuclear power plant and also unpaid bills for customers who avoided shutoffs for four years due to the coronavirus pandemic — that has raised public ire.

Millstone represents 77% of the current public benefits charge and the other 23% pays for various bipartisan programs and recovering charges from the four-year moratorium in which the utilities were blocked from shutting off various customers that started during the coronavirus pandemic.

In addition, state utility regulators recently approved a plan for Eversource and United Illuminating to be repaid about $3 per month per residential customer — depending on their level of usage — in the public benefits charges for their costs in the electric vehicle charger program. That became effective on Sept. 1 and will last until April 30.

The largest portion of the fee, the Millstone costs, date back to a deal the state cut with Millstone in 2017 to ensure that the then-ailing complex would remain open after the owners had threatened to close the station. In return, the state has kept a reliable supplier of electricity that has been crucial in a deregulated electricity system.

The Millstone costs, which started on July 1, will continue as part of a 10-month payment period that some advocates had pushed to be spread out over 22 months to avoid a rate shock. But state utility regulators rejected that idea recently in a 2-1 vote.

In the future, Lamont says the costs could be smoothed out over a longer period of time, which he discussed last week with both Democratic and Republican legislators in his Capitol office.

“One of the things we talked about doing is maybe at least phasing in so there is less rate shock,” Lamont said. “We don’t give you as big a credit during the good times and there’s not as big an increase during the bad times. I think there was broad agreement there. … The question is maybe in the next session we want to do something that smooths it out in the future.”

Senate Republican leader Stephen Harding of Brookfield, who has been pushing unsuccessfully for a special session on electric rates, says the legislature has not done enough to help consumers.

“People need relief now,” Harding said. “Stop the bleeding now.”

Republicans are calling for permanently removing the public charges from the electric bills and instead have them paid through the $26 billion annual state budget.

Their plan also calls for using unallocated federal coronavirus money to help cover “the costs associated with electric vehicle charging programs and provide additional rate relief to ratepayers to the maximum extent possible as funds allow.”

Harding, the now-Senate Republican leader who voted against the Millstone deal in 2017 when he served as a member of the House, dismissed the notion that the system is so complicated that legislators can make only minor changes around the edges that would save relatively small amounts for consumers.

Next move : federal pandemic money

Rather than calling a special session, Lamont has another path.

Instead, Lamont says he is researching how he could allocate federal money from the coronavirus pandemic to help offset the rising electric costs.

Although the pandemic has ended, not all of the federal money that was set aside for Connecticut has been spent.

Under state law, Lamont has the power after Oct. 15 to unilaterally make the decision on where to spend the remaining amount of money.

But both Lamont and state legislators say they do not yet know the precise amount of money in a moving-target situation where money is being spent by multiple departments.

The legislature voted earlier this year that the first $40 million of the unallocated money must be spent on public higher education, but some Republicans said the legislature should discuss further on where the money should go.

“I’m suggesting that the $40 million is better spent paying down the astronomical electric rates of the hardworking people of this state as opposed to giving more money to UConn [and Connecticut State University system] at this particular point,” Harding said. “Speaking with the people of this state, they are in desperate need of relief. We have a plan to offer them that relief.”

The legislature voted in May to earmark the bulk of the federal money in four key areas that were designated as high priorities by legislators. Those areas were public higher education, children’s mental health, cash aid for cities and towns, and $50 million for nonprofits that provide state services through contracts that traditionally cost less than those delivered by state employees.

Two of the largest amounts in the 350-page bill went to UConn and the Connecticut State Colleges and University system, which had both been lobbying heavily for months for more funding.

The money currently under discussion involves funds that had not yet been earmarked for any purpose.

Under federal law, the coronavirus money must be earmarked by December 31 this year and then actually spent by New Year’s Eve 2026. The federal total was originally $700 million, but much of it has been allocated for various programs.

While the final amount has not been set, Republicans agree with Lamont on pursuing the idea.

“That would be significant, immediate relief to the ratepayers in reducing their energy bills and what they’re being forced now to pay in their public benefit charge,” Harding said. “In terms of Millstone — I voted against the measure when I was in the House — but I think there are up years and down years. If you look back at the previous year, the ratepayers got a credit. The Senate and House Republicans have been calling for moving the public benefit onto the state budget so we could have a full and transparent discussion about what the people are actually paying for as opposed to it being baked essentially into a hidden tax.”

A 2017 Millstone deal is driving the high public benefits charge on CT electric bills. Here’s why