Energy officials, consumer advocates and lawmakers from Connecticut and Massachusetts met Tuesday in a unique multistate hearing with utility Eversource to learn more about a recent massive hike in electric bills.
A rate increase in the supply portion of bills means the average Eversource residential customer in Connecticut will pay about $85 more per month for power starting this month.
Other utilities are also facing higher costs to buy power. The average residential customer of United Illuminating (UI) will face about a $79-a-month price hike, and municipal suppliers across the region are also seeing price hikes, albeit more modest ones.
Consumer advocates, lawmakers and utility officials said the price hikes aren’t the direct fault of the utilities. State law allows utilities to pass along costs for buying power directly to consumers. Eversource and UI said they are making no profit on the price hike, which state regulators reviewed and approved.
Eversource officials said Tuesday the recent price hikes are largely the result of a limited fuel supply for electric generation.
James Shuckerow, director of energy supply at Eversource, said that natural gas prices are volatile and that supply issues become particularly acute during the winter months, driving up costs.
“It’s a winter problem. It’s not a summer problem,” Shuckerow said during a joint hearing with energy regulators in Connecticut and Massachusetts. “Many of these pipelines were built by the natural gas companies to provide residential heating. Those gas pipelines have plenty of capacity during the summer months. But unfortunately, during the coldest of days during the winter months, that pipeline capacity is limited.”
While natural gas supply constraints during the coldest months have been a chronic problem in New England, markets have recently been upended by Russia’s war in Ukraine. When natural gas pipeline capacity is limited, Eversource said the region is heavily dependent on liquified natural gas (LNG) for electricity – a form of the fuel that is transportable without pipelines.
Shuckerow said Russia supplied much of Europe’s natural gas, but when the country cut off those supply lines, European countries scrambled to acquire LNG, driving up global costs.
“It’s limited, it’s high-priced and has really led to a change in LNG prices from where we had been recently,” he said.
Officials are reviewing some of the technical rules for how utilities buy power from global energy suppliers. And natural gas prices in Europe are starting to come down.
But Claire Coleman, with the Connecticut Office of Consumer Counsel, said cutting New England’s dependence on natural gas is the simplest solution to avoid dramatic rate hikes.
“Our current regional power supply pricing crisis is a direct result of our region’s overdependence on a single fuel for electricity generation: natural gas,” Coleman said. “Until we’re less dependent on fossil fuels, particularly those that are traded globally, we will remain subject to these global market swings that we have no control over.”
Eversource officials said changing procurement rules still won’t address the underlying problem of natural gas supply shortages in Connecticut and Massachusetts.
Regulators and policy officials are hopeful clean energy proposals like offshore wind or hydropower from Canada can help drive down costs, but the logistical and political challenges of implementing those new energy sources will take years.
Tuesday’s multistate hearing was requested by Senate Democrats and comes as lawmakers are about to go back into session in Connecticut.
Sen. Norm Needleman (D-Essex) concluded the hearing and said he was worried about price impacts to consumers from future supply rate requests, which occur twice a year in January and July.
“I do not feel that we really have a plan,” Needleman said about bridging the possible decade-long gap before alternative energy sources are online and at a scale to adequately address winter fuel supply constraints.
“We still are left with the winter reliability problem for not-an-insignificant amount of time, which puts residents of all of our states at great risk,” Needleman said.
Note: Gregory B. Butler, who is an executive with Eversource Energy, is a member of Connecticut Public's Board of Trustees.
