Sign up for CleanTechnica’s Weekly Substack for Zach and Scott’s in-depth analyses and high level summaries, sign up for our daily newsletter, and/or follow us on Google News!
Connecticut is located in the midst of the nation’s most expensive electric markets. Only Hawai’i and Rhode Island rank higher. The high cost of electricity is prompting Connecticut alawmakers to write legislation to lower those electricity rates. The hitch is that buried in the 80-page bill are decreases in home solar incentives and increases for nuclear power renewable energy credits.
A hearing last month for the bill brought out Connecticut citizens who praised the potentially lowers costs — as well as other folks who decried the dangers that the changes could present to renewable energy.
Democratic Governor Ned Lamont had implored lawmakers during the State of the State address in January to move beyond what he termed “cosmetic changes” to electric generation and, instead, turn to a combination of both renewables and fossil fuels to solve Connecticut’s electricity generation problems. “These high prices impact all of us: working families, seniors on fixed incomes, small businesses, big manufacturers,” Lamont said. “Everyone was mad as hell looking at their bills following the hottest July in recorded history, and I can see why.”
Connecticut residents pay around 15% more in wire and other infrastructure costs, which are included in the delivery portion of utility bills, compared to neighboring states. This delivery portion comprises several charges, such as transmission and distribution charges, federally mandated congestion charges, and electric system improvement charges, all of which add up to increase the overall cost of electricity for Connecticut residents.
The proposed legislation calls for:
- the creation of an in-state procurement authority to watch the power markets and purchase electricity at favorable rates
- elimination of the sales tax on electricity purchased by commercial and industrial users
- expansion of variable time-of-use rates, which inspires consumers to be conscious about when they draw energy due to higher rates during high-demand times
Of particular concern to renewable energy advocates is defining existing nuclear power generation in the state as a Class I renewable energy source. If the existing Millstone Power Station were allowed to sell Class I RECs, it could do so at much lower prices than other clean energy sources because the nuclear plant is already built and running without this added financial support, said Francis Pullaro, president of renewable energy nonprofit RENEW Northeast, as reported by Canary Media.
There would also be little need for solar or wind RECs in the market if Millstone were allowed to sell credits. If enacted, homeowners would receive credit only for the supply of excess power they generate. No longer would they be credited for the costs of distribution or transmission, which are currently part of the compensation calculations.
The Finance, Revenue, and Bonding Committee voted favorably on the bill in April. The next steps are to have the Energy and Technology Committee weigh in for further consideration and revision.
The Problem With Connecticut’s Pipelines
Connecticut and its neighbors are largely powered from natural gas that is fed to power plants through a network of pipelines. Those pipelines stretch thousands of miles across several states before reaching New England. But it’s not just power plants that those pipelines supply — it’s also home heat, gas stoves, hot water heaters, and local industries, all of which count on the natural gas source, too.
With so much demand, prices soar. And it’s even worse in the winter cold, which compels demand for gas to move even higher. Pipelines are pushed to their limits. Older “peaker” plants help out, but they are only good for short periods of time, and they burn fuel oil.
All of the variables in this equation drive Connecticut’s high cost of electricity up and up.
“It’s New England, end of the pipeline, more than anything else,” said state Senator Norm Needleman, (D-Essex), who co-chairs the Energy and Technology Committee. “I think we’re trying to make the best of a situation that has little room to maneuver.” Without abundant resources for hydroelectric, wind, or solar power or fossil fuels, New England cannot moderate its high cost of electricity as do other regions of the US.
As John Moritz explained on the CT Mirror, states like Connecticut have directed their utilities to enter into long-term power purchase agreements at set rates, rather than the fluctuating prices found on wholesale energy markets. That makes it easier for developers to cover costs and to promote carbon-free power.
Lawmakers and industry experts concur that adding new sources of generation can increase competition and lower the high cost of electricity throughout New England. Paradoxically, however, in the closing months of 2024, Connecticut officials declined to enter into any new purchase agreements with offshore wind projects to deflect what would likely have been public pressure over the potential costs for ratepayers.
Offshore Wind Could Be A Way To Lessen Electricity Costs
The Connecticut Wind Collaborative is among the stakeholders making the supply chain case for the domestic offshore wind industry. The Atlantic coast has been ideal for launching the US offshore wind industry, with the advantages of relatively shallow coastal waters, loads of energy-hungry coastal communities nearby, and ample seaport resources. Harnessing that power, however, requires the construction of gigantic turbines and transmission lines to bring the electricity on shore.
The first wind farm serving Connecticut, Revolution Wind, is currently set to come online sometime in 2026, at a cost of roughly $1.5 billion. Revolution Wind is the first US multi-state offshore wind project. Construction of the project is underway, with construction updates available every week online.
The project will generate enough clean energy — 704 MW of offshore wind energy — to power more than 350,000 Connecticut and Rhode Island homes and displace, by eliminating future emissions, more than one million metric tons of carbon pollution.
Offshore wind is an increasingly cost-effective form of clean energy that stabilizes energy prices for customers, according to the Revolution Wind website. It will help to mitigate New England’s winter price spikes, in particular, by diversifying the energy mix and reducing the dependency on natural gas.
Both the Rhode Island Public Utilities Commission and the Connecticut Public Utilities Regulatory Authority have approved 20-year power purchase agreements with local utilities for the project.
Whether you have solar power or not, please complete our latest solar power survey.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Sign up for our daily newsletter for 15 new cleantech stories a day. Or sign up for our weekly one on top stories of the week if daily is too frequent.
CleanTechnica uses affiliate links. See our policy here.
CleanTechnica’s Comment Policy