Governor Ned Lamont and officials from several Connecticut state agencies are advising residents of global energy commodity cost increases that are driving energy prices this winter, including electric generation rates, natural gas rates, and home heating oil prices, and various efforts that are being undertaken in the state to help mitigate the impact of these external forces in Connecticut.
During the pandemic, worldwide demand for natural gas and oil declined as the economy slowed, and producers returned money to shareholders after years of losses, rather than invest in new production. Labor and supply chain shortages, plus weather disruptions like Hurricane Ida, have also hampered production. Demand has now returned, faster than expected, and production is not keeping pace, leading to price increases. Severe weather could make matters worse, by driving up demand for natural gas, which in turn could compromise the reliability of the region’s electricity grid.
Connecticut residents and businesses are already feeling the impact of these global trends in heating oil and gasoline retail prices, and in the supply portion of their natural gas and electricity bills. The supply portion of bills currently constitutes approximately 36% of the bill for Eversource. Standard service generation supply rates for residential customers of the state’s two electric distribution companies, Eversource Energy and United Illuminating (UI), will be increasing from historic lows of 7.08 cents/kWh (Eversource) and 8.01 cents/kWh (UI) during the latter half of 2021, to 11.165 cents/kWh (Eversource) and 10.67 cents/kWh (UI) for the first half of 2022.
Customers who use natural gas may see rates go up in the range of 10 to 20%. Home heating oil customers can expect an increase of 40% above last year and a 15% increase over the average of the last five years. Gasoline customers are seeing higher prices. Consumers can track real-time price information for natural gas, propane, and heating oil on the Connecticut Department of Energy and Environmental Protection’s website. Information about electric rates, competitive supply offers, and energy efficiency solutions is available at EnergizeCT’s website.
“Connecticut and its residents, like everyone else around the United States and the world, are unfortunately seeing the impact of rising energy prices,” Governor Lamont said. “The pandemic, the investment decisions of oil and gas producers, and severe weather events have put everyone in this situation, but my administration is working hard to ensure our policies and programs can help lessen the impact of these global energy trends on our residents and businesses – including smart energy purchasing, investing in efficiency and nuclear, and making sure there’s help available for residents and businesses who will be most impacted by these cost increases. For example, the Connecticut Energy Assistance Program for residents is funded by a record $135 million in federal funding, including $58 million in American Rescue Plan Act dollars.”
“Through our energy policies and assistance programs across several agencies, the Lamont administration has been working to insulate residents and businesses from volatile fossil fuel prices that can have a significant impact on families, individuals, and business owners,” Connecticut Department of Energy and Environmental Protection Commissioner Katie Dykes said. “Whether it’s our efforts at the regional grid level to reduce reliance on natural gas and diversify our generation mix, increased oversight over electricity supply procurement, access to energy efficiency programs and incentives, energy bill assistance, or access to COVID-19 funding for utility bill relief, the state has been looking out for residents.”
The state has taken several actions to help to protect ratepayers from price spikes and grid outages, and to help with energy affordability. Among those actions are a concerted effort to reform the region’s electricity grid – managed by ISO-New England – which is highly dependent on natural gas generation, and as a result, electricity generation prices in Connecticut and across New England are highly sensitive to changes in natural gas commodity prices. The reliability of the region’s grid could be compromised during periods of prolonged cold weather when there is not enough natural gas supply available to meet both heating and power generation needs.
The state has sought to insulate against the commodity price swings from natural gas dependence by investing in renewables, efficiency, and nuclear resources. Since 2012, the Department of Energy and Environmental Protection has competitively procured 710 MW of grid-scale solar and 1,108 MW of offshore wind, and invested in more than 445 MW of energy efficiency – clean energy supply alternatives that reduce our dependence on fossil fuels. In 2019, the state took action to prevent the Millstone nuclear facility from retiring – a critical step that saved ratepayers approximately $2 billion in replacement costs, and retaining a large, carbon-free resource for a diverse and reliable fuel mix for the ISO-New England grid. Starting in 2022, residents will be able to take advantage of storage programs that can help them manage their costs and provide them with added resilience.
The state is also ensuring greater oversight of utility Standard Service. Public Act 11-80 established greater state oversight over the procurement of retail electricity supply for utility standard service (which currently serves about 80% of Connecticut’s residential customers). This approach reduces the risk to Connecticut ratepayers by ensuring portions of electric supply are purchased at different points during the year, which lessens the impact of supply price spikes like those that are happening now. This structure puts Connecticut ratepayers in a better position than some other states this winter, such as New Hampshire’s Unitil residential customers, who will be paying 17.52 cents/kWh beginning December 1.
In addition, the state has strengthened protections for consumers utilizing third-party electricity suppliers. Over the past decade, the state has enacted a series of consumer protections for customers of electric suppliers, including prohibiting variable rates and giving the Public Utilities Regulatory Authority (PURA) the discretion to prevent customers who were designated as “utility hardship” from being switched to electric suppliers. Just this year, Governor Lamont signed Public Act 21-117, prohibiting cancellation fees for residential customers who are under contract with an electric supplier and strengthening PURA’s oversight over electric suppliers. As a result, Connecticut has some of the strongest consumer protection laws in the nation with respect to residential competitive electric supply.
“Starting November 1 through May 1, there is a moratorium on heating source shut-offs for eligible households,” PURA Chairman Marissa P. Gillett said. “PURA urges customers to contact their utility and inquire about the Winter Protection Program, as well as other programs for which they may be eligible. Ask your electric or gas utility, ‘am I eligible to be coded hardship?’ Our collective focus on these issues will mitigate the impact of external forces on our generation rates this winter, but there is more work to be done. PURA looks forward to continuing our partnership with the Lamont administration and other stakeholders to tackle the important issues of energy affordability, and I am proud of the strides made thus far.”
The state has expanded electric utility bill assistance. UniteCT, which was established by Governor Lamont and administered by the Connecticut Department of Housing, provides rental and utility assistance funding for those financially impacted by COVID and has become a model for other states by successfully delivering more than $18 million to electric customers to date, to pay down their arrearages. People who rent their homes can apply through their electric utility company or municipal electric company.
“With the cooperation and collaboration of Connecticut’s electric utility companies, we have been able to move our economic recovery forward by assisting our residents to achieve financial stability,” Connecticut Department of Housing Commissioner Seila Mosquera-Bruno said. “The ability to leverage the available federal resources, in bulk, in order to forestall electric utility shutoffs for our most vulnerable populations has truly been invaluable. The implementation of the robocall campaign to raise greater awareness about the availability of these resources to help with utility arrearages has been in operation for about two weeks now. It has already provided an additional 1,800 eligible renter households with access to these funds. It is important that eligible renter households become aware of this initiative, and be assured that it is not a scam. When you hear Governor Lamont’s voice or my voice, please follow the prompts so this assistance can be used to help you and your families.”
Regarding energy affordability, through EnergizeCT, residents and businesses can access financial incentives for numerous energy-saving solutions, from home energy audits and insulation to heat pumps. These solutions are funded through the Conservation and Load Management Plan, which has supported billions of dollars in savings for customers. The Lamont administration restored funding for these programs in 2019, after several years of legislative “raids.”
PURA has directed all regulated electric, gas and water utilities to offer COVID-19 payment plans, which both residential and non-residential customers are eligible to enroll in through the end of the public health emergency declaration in February 2022. COVID-19 payment plans are available to any customer requesting financial assistance to facilitate the repayment of past due balances in addition to the customer’s current monthly bill. These plans require no initial or down payment or demonstration of financial need; can be up to 24 months in length; and waive any fees or interest in the calculation of the monthly payment amount.
Additionally, heating bill assistance is available for income-eligible households. The Connecticut Energy Assistance Program (CEAP), administered by the Connecticut Department of Social Services, provides winter heating cost assistance to income-eligible households, regardless of their heat source. People should contact their local Community Action Agency to apply. Statewide consumer information on this program is available on the web at www.ct.gov/staywarm or by calling 2-1-1. In addition, Operation Fuel and other nonprofits provide year-round emergency energy assistance to low-to-moderate-income households who don’t qualify for CEAP or who run out of CEAP benefits.
“This winter, our energy assistance program has significantly higher benefit levels from a record $135 million in federal funding to help heat Connecticut homes,” Connecticut Department of Social Services Commissioner Deidre S. Gifford said. “It’s important to note that both homeowners and renters can be eligible. We help enrollees afford the cost of natural gas and electric heat, as well as deliverable fuels like oil and propane. Applications are now open, and so far nearly 23,000 households have been approved for benefits by our Community Action Agency partners.”
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