New CT Law Reviews Standard Service
Senate Bill 4 (SB4) was signed into law on June 23. While this law significantly changes the public benefits charge it also changes how CT’s two local electric companies line up power for standard service customers. But will this change actually reduce residential electricity rates? Let’s dive in and explore why the PURA is now reviewing the standard service power procurement process.
How SB4 Became CT Law
Governor Lamont signed SB4 into law because promised nearly $400 million in savings to CT utility customers. This works out to a cut in electric rates by about 1 to 2 cents per kilowatt-hour (kWh). This may not sound like a lot, but with Standard Service supply rates at 10 cents per kWh right now, this kind of rate cut could reduce average bills by up to $6-$12 per month.
SB4 Changes To Standard Service
We’ve previously discussed SB4 and its potential for electricity price relief. This includes using bonds to cover costs of public benefits programs and updating metering technology. However, the new law has also opened the door for default service procurement changes.
It’s important to remember that CT utilities cannot profit from standard service rates. You pay the same price your utility paid to procure power. The new rule now requires that CT utilities shall procure at least 25% of their standard service load from the ISO-NE market. This means that both Eversource and UI must shop around for the best possible prices for at least a quarter of the power their customers need.
Before this change, the procurement rules said that utilities may include other contracts. In other words, utilities were under no obligation to shop for better rates, even if options were available. As a result, default service customers paid higher rates even prices were lower on the ISO-NE market.
Will New Rules Lower Electricity Rates?
This is good news because a lower standard service rate could encourage third party retailers to offer lower CT electricity rates.
However, not all the legal details are worked out for these new rules. So, it’s too early to tell how the new procurement rules will affect CT energy prices. So while lawmakers predict that these rules could lead to lower prices and bills, it’s still important to shop around for the best electric rates in town.
You can start shopping right here at https://www.ctenergyratings.com. We’ll also keep you up to date on the news and tips that could affect your bills.