Power Projects and Your CT Power Bills
It’s hard to deny that CT customers pay high electricity rates. Our energy bills seem to spike higher especially when demand jumps as well. As a result, lawmakers and energy customers want to know what’s going on. As it turns out, news reports are now looking at CT transmission projects as a possible cause of rising bills.
CT CAPEX Projects And ROE
We all know that CT utilities earn profit by building a stronger grid. But this means more than just replacing old and broken power lines. It also means funding new capital expenditure (CAPEX) projects to bring better tech to the grid. Ideally, these upgrades should make the utility’s grid more reliable. They also reward the company with a return on its investment, or Return On Equity (ROE).
But recently, electric utilities are seeing record profits. For instance, Eversource reported a 10% rise in their profits, with just over $200m in earnings just from transmission charges. Plus, many utilities across the country are launching CAPEX projects to take advantage of the boom in AI data centers.
But while utilities should make a profit on their investment, some critics point out a problem.
In CT, Eversource and UI can only profit from the distribution part of your bill. This means the utilities can pass costs to customers to pay for their CAPEX projects. Utility spending is also growing by a lot. Consider that since 2016, CAPEX project spending jumped from $58 million to $1.2 billion. That is 20 times more money in almost ten years! On top of that, predictions suggest that U.S. utilities could invest up to $1.1 trillion by 2029!
In recent years, utilities have been asking state power commissions for ROE percentages between 9.9% to 10.85%. Not only are these some of the highest ROE requests seen in the past 15 years, but many state PUCs have been granting them.
But customer utility bills are soaring. So, some critics are asking, are CAPEX projects worth the cost? Or are they just a way to pad company income?
Does CT Need More FERC Oversight
Some officials question whether some CAPEX projects are fairly priced or even needed. In other words, should they be seeking long term answers to power problems? Notably, the CT deputy environmental commissioner said that while transmission isn’t the biggest part of energy bills, it’s one of the fastest-growing.
As a result, some lawmakers are demanding better oversight into CAPEX projects and have called the current system “broken”. They argue that as things stand, FERC could lower energy prices if they forced utilities to halt unneeded projects. And because of the flood of AI data centers expected by 2029, some argue that utilities should focus on data center power needs.
Will CT Bills Keep Rising?
Right now, it seems likely that CT bills will rise. However, with more oversight, we may see fewer pricey CAPEX projects. This could help lower bills or reduce surprise spikes.
Be sure to keep an eye out for https://www.ctenergyratings.com for the news that could affect your bills. You can also shop for the best energy deals in town, right here.