What’s Driving Eversource Electricity Delivery Charge Increases?

Posted on Posted in Best Electricity Suppliers, Cheap Electricity Rates, CT Electricity Rates, Eversource Electricity Rates, Trends, UI, Uncategorized, United Illuminating
Find out how Eversource's electricity delivery charge and other services could change in the coming months. Learn if it affects your CT electricity rates!
Will PURA’s investigations change electricity delivery charges and default supply rates? Learn what might change your coming CT electricity rates!

PURA Investigates July Bill Outrage

High July bills shocked CT residents in Eversource’s service area. Consumer outrage to the unexpected high electricity delivery charge have led to a rate suspension pending an investigation by the Public Utilities Regulatory Authority (PURA). While PURA investigates this issue, the public asks “How could this happen?”

Understanding Basics of Electricity Bills

Currently, for most Connecticut energy customers, Eversource is responsible for supplying electricity for default service customers. The supply and delivery charges are the prime factors in your monthly Connecticut electricity bills. The supply charge is the cost of electricity going to your home. The electricity delivery charge covers the cost to deliver electricity and for the maintenance to provide reliable energy to area customers. Other factors can affect your bill, but these two charges are the largest parts of your bill.

The end of the winter season and the effects of the global pandemic saw an unusually high surplus of gas in storage. This led to Eversource’s explanation that supply charges fell by about 22%. However, most CT Eversource customers discovered that the electricity delivery charge on their bill were the spiking and the nonbypassable federally mandated congestion cost (NBFMCC) may be to blame.

How the NBFMCC Affects Your Bill

Utilities collect the NBFMCC to cover costs approved by the Federal Energy Regulatory Commission (FERC) and by PURA. Pura reviews these charges to make sure that electric companies recover no more or less than their costs. This fee cannot be avoided by switching to a different electricity company as it is intended to help recoup the utility’s business costs.

In effect, if the utility has to pay more for basic operations, then the  NBFMCC should be set to cover that cost and nothing more. Residents and government officials questioned the fairness of Eversource’s NBFMCC. The economic hardships of the global pandemic make this especially important. Questions over rate hike’s justification is why PURA ordered the current rate suspension. While PURA conducts their investigations, Eversource has put out statements that points fingers at the Millstone Nuclear Power Station.

Is Millstone Responsible For Rate Hike?

Millstone is one of the most important stations in the state, as it provides jobs and electricity. When faced with plant closure, the state drew up a 10-year agreement that mandates utilities, like Eversource, purchase power from Millstone. When regulators approved the rate hike, Eversource testified that the average bill for typical residents would go up by about $5.50 per month with ratepayers also paying a portion of the extra costs as required by the NBFMCC. Under normal circumstances, this might not have been a problem for ratepayers. But with COVID-19, CT residents are spending more time at home and using more power than ever before.  This causes households to exceed average monthly bill estimates, and now the rate hike hits families harder.

Tropical Storm Isaias Impact

Tropical Storm Isaias adds another wrinkle to the story when it left many CT homes without power. Many homes were without power for up to 10 days.  As a result, Eversource and United Illuminating’s slow response to the situation left homeowners outraged. Add to this the fifth summer heat wave hit CT a few days later, leaving residents to struggle with keeping cool. Famlies with elderly or medically at-risk members suffered in the heat called and complained for action at a fevered pitch. In fact, the failed Isaias response even led to Bridgeport mayor, Joe Ganim to threaten a lawsuit against United Illuminating.

PURA And Policy Makers Call For Reform

Policy makers and CT residents are now saying the situation requires reform. As Marissa Gillett said to Eversource in the wake of the storm, “Utilities are in the business of delivering reliable service, and the public should know that I’m not interested in their excuses.”

Eversource supplies electricity for default service customers and maintaining the distribution network. Many at the meeting argued the utility is handling too much to provide adequate responses during an emergency. Policy makers are now calling for big changes and reforms to CT’s electricity market, including stripping away the utilities’ roles as default electricity suppliers. The role of default electricity supplier would fall to nonprofit agencies. Eversource and UI would then focus on distribution service.

New Developments After The Pura Meeting

The August 24  PURA hearing was primarily called for Eversource to justify their electricity delivery charge increase. In due course, new facts came out regarding the rate increase that paint a picture of failed transparency and communication. Specifically that Eversource told customers that a PURA-approved administrative adjustment as “an approved rate hike”. This led to PURA and Eversource coming under fire from ratepayers and legislators alike. Doug Horton, VP of Eversource Distribution Rates said, “If I could go back in time and provide more information and…change the filing to incorporate the full effects of what the customers would have ultimately experienced I would have done that.”

Early in the meeting, U.S. Sen. Richard Blumenthal expressed interest in breaking up Eversource to create locally controlled utilities. He argued these smaller utilities will do better work when faced with a smaller workload and lower costs.

What Will PURA Do Next?

Lawmakers and ratepayers are not happy about the current situation. Both regulators and consumers believe the electricity delivery charge hike, miscommunication, and slow emergency response prove that Eversource is not properly performing their job. While both Eversource and UI are defensive and sympathetic about how the aftermath of Tropical Storm Isaias unfolded, they are ne’ertheless steadfastly proud of their work in the face of COVID-19 precautions.

One thing is certain that customers can expect future hearings and meetings to discuss a variety of reforms. Such reforms could truly revolutionize the Connecticut electricity marketplace. To that end, CTenergyratings will continue following this story as it develops to help CT electricity customers stay informed and understand any changes when they materialize.

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