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Connecticut Deregulation History

The past couple of decades has seen a remarkable change in the way we use and pay for energy here in Connecticut. It was much different before Connecticut changed legislation to give consumers a choice of suppliers. That was back in May of 1998. Now, it has changed the playing field with regards to CT electric rates and how Connecticut power companies go about their business.


But what was the big idea behind the move towards more consumer choice and how has it affected people's lives since?


The Legislation

Well, it's vital to look at what the legislation PA 98-28 achieved first. At that time, the state had two electric companies and the Department of Public Utility Control looking after power. There was no other choice. The legislation asked the three organizations to take steps towards a more competitive market. They were required to free the power generation components from all their other business areas, which had to be complete by October 1999. This electricity generation could then be offered to other, external companies. In turn, they would act as energy suppliers to Connecticut households and businesses. It's this single act that deregulated the entire market and has led to more consumer choice.


The Utility Companies

But, as ever, the key to the whole story boils down to money. Where would the companies find compensation for their lost profits? How could they reclaim the stranded costs of giving up their generation? With so many plants and purchased power contracts, there was a lot at stake. The DPUC looked at their stranded costs and decided on a compensatory amount. They based this on their previously approved recovery rates. And to foot the bill, four charges were set up that all consumers would pay via their energy bills, which are still present today in CT electric rates. It's money set aside to fund energy conservation strategy and renewable initiatives.


How do Consumers Win?

For the consumer and businesses, the legislation has been a godsend. Up until then, the two Connecticut power companies ran the show. It was a slow-moving system that was heavily regulated from end-to-end. Capacity has risen to unprecedented levels, and can now handle large fluctuations with ease.


The Green Energy Impact

It's a lot more efficient, too, thanks to the investment initiatives set up by the legislation. And Connecticut power companies are providing greener, cleaner energy than at any time in the past. The knock-on effect of this means Connecticut's environment is in a much better place now. There have been significant improvements in the population's quality of life. And, there is much more focus on preserving the State's natural resources.


Lower Rates

But the biggest impact for everyone is that CT electric rates are lower, thanks to the wider array of choice. Under the older system, it was regulations that decided on the price of energy. These days, it's the market. And, as cheaper options arrive on the scene, prices are driven ever downwards, and everyone benefits.


The Final Word

To conclude, the Deregulation of Energy in Connecticut has been a huge success. Both businesses and families are now enjoying the cheapest and cleanest energy the state has seen. And, with added competition, there is plenty of hope it will continue like this for many years.

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