Face the Facts: Proposal aims to lower electric bills

As you probably know, soaring electric rates have been an issue in Connecticut for years.

We have paid among the highest in the country for a variety of reasons. Policy decisions from state leaders among them.

Now, there's a comprehensive bill on the table with proposing changes on how we buy power and how we pay for it.

Senator John Fonfara (D-Hartford) crafted the bill. He put it forth this week.

Mike Hydeck: You were on the committee for decades and then chair for 12, for Energy and Technology. Let's start with the public benefits portion of the bill. That's the one that can go from anywhere $100 to $500, $600 on people's bills. How would you like to address that being changed moving forward? And you say that's going to provide savings.

John Fonfara: Yes, and it's been an issue for many people across the state, businesses across the state, that are seeing this increase in charges unrelated to the generation and delivery of electricity to your home or to your business.

Mike Hydeck: Right, so to be clear, Eversource is not making money off the public benefits charge. The state mandates it so we can pay for infrastructure, for charging stations, things like that.

John Fonfara: Well, it's a host of things, from un-collectibles, folks who can't pay their bills. It's for renewable investments, conservation investments, a host of contracts. Millstone is part of that. Their contract is part of it.

Mike Hydeck: The nuclear power plant. So you want to take this off the bill. What do you do with it?

John Fonfara: We bond for it. And we spread it out over more years, but it's $800 million a year for three years. And then we decide what we want to do with those charges. The legislature will decide whether or not some of them go back on the bill. None of them go back on the bill. We'll have time to evaluate each one of them. Up until this point, for years, we've done this, but we always had enough revenue where rates weren't affected. Those days are over, Mike, and now when we put things on the bill like that, and there are many, many things on there that are in this public benefit charge that have caused rates to go up even further. And so that's the outrage that the public is speaking to. And so we remove that. It will be a 20% reduction in everyone's bill immediately, once we bond for that.

Mike Hydeck: So you've gotten a little pushback. Senator Norm Needleman, who is on Energy and Technology, goes, 'I don't know if we should bond and borrow money to pay for things like that.' How do you try to counter that, when he says, 'Look, we should probably do this a different way.'

John Fonfara: Because we don't make cost for electricity a priority in Connecticut. We serve a lot of masters, but cost is not one of them. And this bill is making cost the priority. Do we have other considerations? Absolutely. But for the first time, Connecticut will say cost, and we want to become, in the national average, not the leader in the country in terms of rates.

Mike Hydeck: Tiny state, huge electric bill.

John Fonfara: And it's affecting businesses who might want to come here, grow our economy, businesses to expand in Connecticut. It's hammering a lot of people, and so that part of the bill will be reduced. The other part of the bill we'll get into, but also potential for another 20% reduction.

Mike Hydeck: So you also want to change the way we purchase power, right? We apparently purchase it on a schedule, four times a year. You want to change that. How?

John Fonfara: Well, we want to go to a model where there are people who understand how to purchase power, and they do it every day, and they look for opportunities. You might see a good three-year contract that's at a very low price today. We don't do that. We have an auction three, four, as you said, times a year. We average those auction results, and that's our rate.

Mike Hydeck: So if we buy gas for these turbines, or whatever our electric contracts are, that goes up and down. We want to try to buy it on the dip.

John Fonfara: Buy it on the dip. Use many tools that some people know about, CMEEC, which is in six towns, and they buy for municipal electrics. Very aggressive process, very opportunistic process, so they find the lowest rates. They make the right decisions at the right times. It's a very thoughtful process, not one that's based on a calendar that maybe, that's not when you would buy, but the calendar says, and the law says we must buy today.

Mike Hydeck: So you want to start another agency that's responsible for doing that, purchasing, right?

John Fonfara: That, and also managing the grid. Our grid is very inefficient. Our delivery transmission of electricity is extremely inefficient. People use power when they shouldn't and don't use it when they should. We will introduce time of day rates, or time of hour rates.

Mike Hydeck: Like peak and off-peak.

John Fonfara: Peak and off-peak. And a substantial difference. Three hours on peak, the rest of time off-peak. And we want it from four to seven in the afternoon, weekdays, saying, don't use power then. We'll reward you if you shift to other times. A substantial difference, something like nine cents off-peak, 27 on peak.

Mike Hydeck: So first of all, I think I know how this could be measured. Because how can you watch my electric use and charge me for the peak rate or not the low peak? I'm thinking that has to do with smart meters. Am I correct on that?

John Fonfara: Absolutely.

Mike Hydeck: So those are expensive. That's a big tug of of war of getting those done. How do you pay for those smart meters and have it not come out of the consumer's pocket and raise the rates again, just a different way.

John Fonfara: First of all, UI has, almost all of their customers have smart meters already. They're ready to go. Eversource for large customers have them already, but their plan is to deploy them over the next two, three years for everyone.

Mike Hydeck: That's going to be on my bill though, right?

John Fonfara: It will be spread over many years. 15 to 20 years. So we're really working hard to, any additional investment you have to make that they're not, our goal is to lower rates, not to raise them.