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Face the Facts: What makes up the controversial Public Benefits Charge on electric bills

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Sen. Ryan Fazio (R- Greenwich) is talking about what makes up the controversial Public Benefits Charge on our electric bills and how Republicans in the legislature want to address it.

Mike Hydeck: First, it was the public benefit portion of your electric bill that got boosted a few weeks ago. Now this week, both Eversource and United Illuminating announced that state regulators approved a rate hike on the price you pay per kilowatt. So why is this happening? And there any ways for relief on the horizon? joining me now, Senator Ryan Fazio, Greenwich, Republican, good to see you again.

Ryan Fazio: Thanks for having me.

Mike Hydeck: Energy and Technology Committee for the Republicans. So we learned this week that, you know, they got this rate hike, but they say it was connected to the electric vehicle system. Is that true? And why?

Ryan Fazio: Yes. So basically, going forward, rate payers are going to have to pay a little bit more in the public benefit section of their bill in order to subsidize the installation of, you know of personal electric vehicle chargers.

Mike Hydeck: Oh, at homes.

Ryan Fazio: Yes, at homes. So I think that's a regressive tax. I think that's rather unfortunate, and it's layered on top of electricity rates that are already far too high, the third highest in the country. And it's those public benefit sections, the 15 different government programs that you're paying for in your electricity bill that are contributing to us having the third highest rates in the country. So I and other Senate and House Republicans have called for a special session to implement reforms to try to solve these problems and bend the cost curve down, because we cannot, you know, view it as acceptable that Connecticut ratepayers are paying the third highest in the country.

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Mike Hydeck: Is that, in a way, nibbling around the edges, though, and I say this, give me a second here, it's like we're trucking in power from away from our state, so that's where a lot of the cost happens, compared to other companies, where, excuse me, other states that have it much closer. Is that a big problem that we need to solve on a bigger picture basis?

Ryan Fazio: Yeah. I mean, we wouldn't expect Connecticut to have among the lowest rates in the country because of its geographic restrictions. At the same time, we have the third highest rates in the entire country, higher than our neighboring states. The only two states that are higher are Hawaii, which is an island, and California, which has kind of lost its mind. So we need policies that are practical, that reduce the cost of delivering and generating electricity, that ensure we have reliability of the grid, while also protecting our environment. And the five point plan that I co-authored with House and Senate Republicans and released, re-released, last week, I think, will accomplish those goals in the long run. We want to be responsible leaders in this state. We don't just want to cast stones, but the fact of the matter is that state government policies are partially responsible for why you have such high rates, and state leadership is necessary to help solve the problem.

Mike Hydeck: So as you know, Norm Needleman is the co-chair of the committee on the Democratic side. He is calling for, hey, we need to reconsider. He's asking PURA to reconsider this, put a letter out, and he's asking them to do that. Do you support reconsidering this particular rate increase? And he's talking about spreading it out over more months. What's your take on it?

Ryan Fazio: Yeah, I think we should actually go into special session to preempt this program in the future, to discontinue it going forward. Because as much as I think EVs are a good thing, and I'm pro EV, I'm also pro consumer choice and pro affordability. So we shouldn't have a tax in your energy bill to pay for someone else's expenses, and we need to re examine how we are paying for so many different programs through our energy bills in the first place. So I think the state legislature could step in and preempt it through legislation going forward. As for spreading out the costs over time, that would require us borrowing, essentially, from Eversource and UI at a 9 percent interest rate, because that's their cost to capital. So you would actually be increasing the overall rates in the long run. That's borrowing that's not responsible, and it would be increasing the overall rates that consumers have to pay. So I actually disagree with that approach.

Mike Hydeck: You've called for that public benefit portion to be rolled into the state budget and not on the rate payer bills. Why do you think that's a good idea? Doesn't that just sound like another way to sort of tax somebody if you're just going to move, it seems like shuffling the deck chairs to me.

Ryan Fazio: Well, because there is a spending cap in the state budget, so the state budget cannot increase spending overall by more than the rate of inflation or household income growth year after year. That's because the of 2017 bipartisan budget agreement that implemented those fiscal controls. That will require legislators then to prioritize the most important types of spending. And these are social kind of programs anyway, so they're normally considered part of a budgetary discussion and debate. Some of them should be rolled back and pared down, others should still exist, but by having them as part of the budget debate, then we're going to evaluate them for their costs and benefits every two years, rather than just automatically tax you into perpetuity through your electricity bill.

Mike Hydeck: Senator Ryan Fazio, I have to leave it there. Thanks so much for coming on today, we appreciate it.

Ryan Fazio: Thanks again.

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