Public-Private Partnership Identifies Ways To Help Lower Winter Energy Prices, From Electricity to Gasoline
(HARTFORD, CT) – Governor Ned Lamont announced that in response to calls from his administration and other Connecticut state officials – including the Department of Energy and Environmental Protection (DEEP) and the Office of Consumer Counsel – to do more for customers in the state amid historically high electric prices, utility companies Eversource and United Illuminating (UI) have agreed to work with state leaders on a short-term/interim Customer Relief Plan to provide immediate relief to electric customers this winter.
Connecticut state leaders have emphasized the importance of acting quickly and advancing options to reduce bill impacts for low and middle-income customers who are struggling to pay electric bills under unprecedented economic circumstances.
The package of near-term actions developed through the combined efforts of Governor Lamont, DEEP Commissioner Katie Dykes, Consumer Counsel Claire Coleman, Eversource, and UI is in part the result of benefits from the long-term clean energy power contracts signed at the direction of the Lamont administration and the Connecticut General Assembly to help secure the future of the Millstone nuclear power plant and other carbon-free generation resources. Eversource and UI have also agreed to corporate contributions for energy assistance to provide support for customers.
The Customer Relief Plan has multiple elements:
Today, Eversource and UI will file a motion with the Public Utilities Regulatory Authority (PURA) seeking approval for the establishment of bill credits to fast-track the return of long-term power contract earnings to all customers starting January 1, 2023. This proposal will provide Eversource customers with a monthly bill credit of around $10 per month – approximately 12.5% of the average customer increase this winter – for the peak winter months starting January 1, 2023, and continuing through April. Data on how this will impact UI customers is being calculated and is expected to be available soon.
The companies will also seek approval for a discount for low-income hardship customers to accelerate the 2021 Take Back Our Grid Act provision enabling a low-income discount rate by providing a flat-rate credit to financial hardship customers starting in January 2023 until the new PURA-approved low-income discount rate goes into effect in 2024.
In order to provide additional assistance to customers struggling with unusually high energy prices this winter, the Customer Relief Plan also includes an Eversource shareholder expense of $10 million for energy assistance to customers in need, including moderate and middle-income customers who are struggling to pay their bills.
UI has agreed to pay $3 million to Operation Fuel for direct assistance for electricity and heating costs, subject to PURA’s approval of a settlement agreement with the Office of Consumer Counsel.
Governor Lamont said, “I appreciate Eversource and UI working with us to identify creative near-term actions that will help provide Connecticut residents with some relief from high energy costs and the significant impending rate increase on January 1. Keeping Millstone online has proven to be a great investment for Connecticut, and it’s important that residents feel the benefit of the net profits generated by the plant when they most need it. I also appreciate that this plan includes Eversource and UI corporate funding that will go to Operation Fuel for an energy assistance program. Complex issues call for creative solutions, and this public-private partnership paired with the energy assistance actions expected to be taken by the General Assembly in special session today will provide residents with some much-needed relief and protection this winter.”
Commissioner Dykes said, “With a difficult winter ahead, every penny counts, and I’m gratified that DEEP’s clean energy procurements are generating revenues that will help lower customer bills by another $10 per month this winter. Along with Governor Lamont and Consumer Counsel Coleman, we worked with the utilities on a plan to get these proceeds into their customers’ hands quicker. With the supplemental funding anticipated to be approved today by the legislature for our Connecticut Energy Assistance Program, as well as directing funding from fines issued by PURA to nonprofit energy assistance programs such as Operation Fuel, assistance will be there for residents struggling with high electricity and heating oil costs as we continue to navigate these extraordinary circumstances impacting energy markets.”
Consumer Counsel Coleman said, “This proposed package – together with the energy assistance funding that will hopefully be approved by the legislature today – provides needed short-term relief to customers and is an important first step to addressing the global energy crisis that has strained winter energy affordability across New England and here in Connecticut. But we still have much more to do, and I hope today’s steps are the first of many actions that will be taken by our utilities, suppliers, as well as our state, regional and federal leaders to cost-effectively address our broader energy affordability and adequacy challenges. This needs to be the last winter that we face such a crisis.”
Steve Sullivan, president of Eversource Connecticut, said, “We know how challenging increased energy costs are for our customers, especially during these times, and want to do everything we can to help. As an energy delivery company, we can’t control the cost of electricity on the supply side of our customer bills, but it is critically important to us to uncover any and all options to provide relief for our customers. Although market conditions are tough, Connecticut’s decision to commit to contractual arrangements like Millstone is paying dividends for customers and is critical to help offset bill impacts for customers this winter.”
Frank Reynolds, president and CEO of United Illuminating, said, “UI has been a member of the Connecticut community for over 100 years, so when our customers are facing the burden of rising energy costs due to a volatile global market, we’re committed to doing everything we can to help provide needed relief here at home. While we don’t have the ability to control the cost of the energy generation supply, we are here to help our customers above all. As we enter the winter months, we remain committed to coming to the table with all parties to find additional solutions for hard working families across Connecticut.”
Today’s announcement compliments other actions to help Connecticut residents with energy affordability that are expected to be approved by the General Assembly in today’s special session. Those actions include:
Supplementing this year’s $98.5 million of federal Low-Income Household Energy Assistance (LIHEAP) funding with an additional $30 million in American Rescue Plan Act (ARPA) funding to the Connecticut Department of Social Services (DSS). This additional state-directed funding substantially mitigates the impact of unusually high energy prices and will help ensure that funding for the state’s energy assistance program (the Connecticut Energy Assistance Program, or CEAP) is available to low-income households.
Requiring PURA to direct at least 95% of proceeds from fines in fiscal years 2023 and 2024 (including an anticipated fine in excess of $4.4 million) to nonprofit energy assistance programs, such as Operation Fuel.
Extending the ongoing suspension of the state’s 25 cent-per-gallon excise tax on gasoline through December 31, 2022, and then phasing it back in over a period of five months at five cents per month through May 2023. (Connecticut is one of only three states in the country that have a gas tax suspension in effect.)
Extending the ongoing suspension of fares on all public transit buses through March 30, 2023, which is the maximum date that complies with 12-month length-of-time federal restrictions for temporary public transit pilot programs.
DSS Commissioner Deidre Gifford said, “I’d like to thank Governor Lamont and legislative leaders for the anticipated extra financial help for the Connecticut Energy Assistance Program. This new state-directed funding will build on a recent boost in federal funding provided by Congress. This is particularly important because we are seeing increased interest in the program driven by a new, streamlined application process and spikes in the cost of deliverable fuels like home heating oil, and we will need the federal funding to ensure that regular program benefits get to all eligible households. The extra state funds will help us to get more benefits to more households than we originally planned, particularly those dealing with high fuel costs. In partnership with our state’s nine community action agencies, DSS is working hard to keep more families warm than ever before. We have streamlined CEAP eligibility processes and are improving our customer service. For example, we have launched an online application option and DSS clients enrolled in SNAP or cash assistance programs can get immediate income eligibility verification when they apply online. We have also worked to ensure that we have strong program participation within the deliverable fuel vendor community and are happy to report that we have more than 240 vendors participating in every part of the state.”
Nearly 52,000 households have already applied for CEAP this season, an increase of 17% over last year at this time. Benefits are available for households with incomes up to 60% of the state median income, which equates to roughly $76,465 for a family of four. These benefits are usually paid directly to the utility company or fuel supplier. Households that heat with deliverable fuels like oil or propane may be eligible for multiple free tank refills.
Interested households should apply online at ct.gov/heatinghelp or contact their local community action agency. Additional assistance is available by calling 2-1-1.
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