It’s a stunning, temperate Sunday as Rep. Jaime Foster, D-Ellington, knocks on doors in a neighborhood she has served for two terms in the Connecticut legislature, hoping to make it three. Today there’s no need for heat, no need for air conditioning, and apparently no need to bring up the cost of running either.
It’s an issue that just a few months before had pretty much everyone in the state seriously energized — pun intended. But on Foster’s rounds this day, no one mentions the big electric rate changes and eye-popping bills that slammed consumers beginning July 1, followed by a second round of increases Sept. 1.
“Right now utility rates come up sometimes,” Foster said. “In July, that was all anyone talked about.”
For weeks this summer, Republicans pushed for a special legislative session to authorize the use of leftover pandemic federal funds from the American Recovery Program Act (ARPA) to provide ratepayer relief as well as make serious structural changes to electricity costs and payments. Their weekly news conferences were actually continuations of similar proposals Republicans made during the last two legislative sessions.
“I think the Democrats made it easy for us and created this as a political issue,” said House Minority Leader Vincent Candelora, R-North Branford. “Back in February when we put together our proposals — they were fairly modest — and they refused to even have a public hearing on them. So it sort of created fodder for us.”
In contrast to Foster’s experience, Candelora said utility rates in the context of affordability are the single biggest issue people point to as he knocks on doors for other candidates. He is facing no opposition this election cycle.
Rep. Jonathan Steinberg, D-Westport, and co-chair of the Energy and Technology Committee, does have an opponent. He said utility rates have come up occasionally as he campaigns.
“(Republicans) were searching for a salient wedge issue; this was the one,” he said, adding that Democrats may have opened themselves to the Republican offense. “We saw this coming, and we tried to give our leadership a heads up, and they didn’t think it was a significant issue. I think they came to appreciate the fact that in some races, in very challenging, competitive districts, it was a bigger issue, and some of my colleagues, particularly first termers, were struggling to articulate a point of view on it and to put it in context.”
It would have been a logical subject for the voters to bring up with Foster as she knocked on doors in a maze of identical rental town homes, asking residents whether they needed anything or there was something they wanted her to work on. Foster is vice chair of the Energy and Technology Committee. Like Steinberg, she knows the subject matter.
And Foster herself twice in the last two years also filed legislation to use ARPA funds to help cover some electricity costs.
“It is a complicated issue and when we started peeling back those conversations, those talking points, it had less hold on the public,” she said in explaining the flagging interest.
Jeffrey Berte, a constituent Foster asked about the rates, offered the observation: “Utility companies never seem to lose money.”
Troy Dabbondanza, another constituent she asked, said he’d seen a lot of social media posts about it. “People asking about the energy bills and about the — trying to think what it was.”
“The public benefits charge,” Foster offers.
“Yeah, public benefits,” he said.
That does, indeed, seem to be the key issue.
And Foster saying it’s complicated could be an understatement.
Truths, fictions and your electric bill
What happened this summer, that at least for a while propelled electric rates into a big and seemingly pervasive campaign issue, was a confluence of cost factors: high electricity usage, some very high rates, bigger than normal payments that were needed for several items — especially the Millstone nuclear power station, a new bill format and a whole lot of confusion and misinformation about all of it.
Let’s start with a few basics. The Public Utilities Regulatory Authority (PURA) sets rates. There are many different rates that fall into several categories. The one most people are familiar with is for the actual power, which is adjusted twice a year — in January and July.
There’s a big buckets of rates that are set through a Rate Adjustment Mechanism, RAM. Broadly, it’s typically a bi-annual process that reconciles what PURA thought the utilities, Eversource and United Illuminating, were going to be spending in a year ahead and what they actually spent. These expenditures cover a host of services the utilities perform that, along with other factors, by law they must be reimbursed for.
Another basic fact is every single charge on your bill except one is based on how much electricity you use. What you use is multiplied by whatever the rate for that charge is — and that’s what you pay. It then follows that one of the ways to pay less is to use less electricity. This was not the summer to do that.
July was hot. Really hot. It wasn’t the hottest July or summer on record in Connecticut, but it was close. People were using a ton of air conditioning, which meant they were using more power. Ironically the rate for that power went down substantially in July over the previous period.
But the bulk of the charges set through the RAM went up, and some went way up.
It was rates in a large group of charges called the Public Benefits category that got a lot of the focus and pushback. As a result of a new bill format, most customers are getting a more granular list of the charges in that category. This led many people, including some legislators and candidates, to mistakenly think new charges had been added. There are a few more recent charges, but most have been part of what customers have been paying for years — if not decades.
The item within the public benefits category that became the main political football is money customers have to pay to make up for those who have not paid their bills. Utility customers have been paying for this “since the dawn of time,” in the words of one state official.
The non-payments, known as arrearages — bad debt in other words — is an ongoing operational expense. But ratepayers only have to cover them in the public benefits category for those customers who are classified as hardship cases. That process is done through the RAM. Due to COVID, however, and the general lag time in processing bad debt — a year or more — more than usual came due recently.
The bad debt from non-hardship cases is handled differently and outside the RAM process. PURA has the ultimate say on how much of that debt will be paid by ratepayers.
The issue of bad debts plus a moratorium on utility shutoffs that had been put in place when COVID started have also caused confusion. Shortly after the pandemic lockdown began in March 2020, PURA authorized a moratorium on shutoffs for non-payment of all regulated utilities. By September 2021, that moratorium had ended for all non-hardship customers.
The hardship customer shutoff moratorium technically ended at the end of October 2023. But then the regular 6-month winter shutoff moratorium kicked in — so it wasn’t until May 1 of this year that no moratorium existed.
Republicans have invoked that moratorium as the cause of some of the rate increases, capitalizing on the notion that folks who pay their bills are getting stuck paying for those who don’t. But paying for bad debt is not new, and it’s impossible to know whether the moratorium was a major, or any, factor.
Right or wrong, the characterization stuck.
“I think what really got people’s goat was having to pay other people’s bills,” Candelora said. “That people understand. And so that was something going back to February that our caucus had honed in on and said, ‘you know, we should be using COVID money to pay that down.’”
House Majority Leader Jason Rojas, D-East Hartford, and others noted that, given the amount of ARPA funds available after most of them were used to help out higher education, dedicating ARPA money would have amounted to little more than a gesture. The calculation is ratepayers would have had their bills reduced by about $5 a month.
“If we simply want to look at it as a political issue as opposed to a legitimate policy, I’m sure we could have done something, but I don’t know that it would have been meaningful,” Rojas said. “They wanted to make it more political, and it was hard to take it seriously.”
Rojas, who also has no opposition in this election, is campaigning and door-knocking for other candidates. He said he’s not hearing about utility rates from voters with the frequency many would have assumed.
“It was certainly far more when the first bills came through,” he said. “It’s important to not overreact to the situation or try to exploit it for political reasons because I think it only confuses the public more on something that’s already complex.”
Rojas and Candelora both admit using ARPA funds to cover some of the bad debt is a short term fix. Rojas said he would be open to discussing one of the other solutions Republicans have been pushing — moving the bad debt payment from ratepayer bills to the state budget. Candelora said he thinks people understand that long term solutions will take a lot of time.
There is one new longer-term policy now in place, however. It’s called the Low Income Discount Rate, LIDR, which began in late 2023. It uses metrics from other low-income programs such as SNAP, previously known as food stamps, to automatically give low-income ratepayers lower electric rates.
Implementing this system finally catches Connecticut up to its neighboring states, which have done this sort of thing for years. Among its goals is to help lower the number of unpaid electricity bills.
Ironically, a far more significant contributor to the higher energy bills was the cost for the Millstone contract — hammered out in 2017 to keep the region’s largest power generator from making good on its threat to shut down. The biggest supporters at the time were Republicans, especially the then-Republican Senate co-chair of the Energy and Technology Committee, Paul Formica, who represented the district in which the plant is located.
The actual power purchase agreement took another couple of years to finalize. Its structure requires Eversource and UI to buy the power for a fixed price, which they can sell on the wholesale market. That means it competes with the cost of natural gas.
Effectively, if gas prices are high, Millstone is a good economic deal. But under current conditions of extremely low natural gas prices, Millstone is costly and Connecticut ratepayers have a lot of ground to make up. That’s because conditions from COVID and the Russian invasion of Ukraine, when natural gas prices spiked, caused year-ahead predictions that Millstone’s power prices would work to Connecticut’s benefit — but they didn’t.
In 2023, Millstone cost Eversource nearly $297 million more than in 2022, and it cost UI more than $54 million more, according to information provided by the Connecticut Consumer Counsel’s office. Those were by far the largest increases in cost each utility incurred.
An effort to lessen ratepayer pain by stretching payments out over an extra year failed. To make matters worse, a delay in the RAM timetable meant paying for all of it over 10 months instead of the usual 12.
Then PURA announced another rate increase would be coming in September to adjust for a couple of new programs that utilities hadn’t been paid for. An EV charging program, in particular, had three years of costs to make up.
But then something else happened: the weather cooled down.
The calm after the storm
While a number of people think just being able to turn off the air conditioning combined with lower rates for power account for less chatter about electric rates overall, Sen. Ryan Fazio, R-Greenwich, the ranking Republican on the Energy and Technology Committee, said he still hears plenty about it, even in his wealthy district.
“I hear it a lot at people’s doors. It’s a major concern,” he said. “It’s something that really is resonating with people. People are very frustrated.”
Fazio is among very few candidates with a detailed energy plan on their website. He was an architect of the initial Republican plan floated two years ago to address utility rates and other energy concerns. He also supports using ARPA money to give ratepayers a little relief and advocates for moving the public benefits charges into the state budget.
He said he thinks people understand that real energy reform is a long-term process.
“There’s a plan that’s out there for medium and long term relief. And I think most residents understand that that’s desirable,” he said. “The goal is to change policy, and it has been for two years. And the public is absolutely furious at the bills that they’re paying and they want to see changes.”
Fazio’s opponent in what is expected to be a tight race is Nick Simmons, a first-time state senate candidate with experience in the Biden and Lamont administrations.
“It’s certainly a very urgent need and a top issue for a lot of voters that I speak with, and which is why it’s also become one of my top issues, which is overall affordability and cost of living,” Simmons said.
He points to the Millstone situation, saying he would have preferred better accountability and renegotiation options as a way of preventing customers from paying more than they should.
“What I’m hearing from many Republicans is more political gimmicks than actual focus on solutions,” he said. “Let’s get into a [legislative] session. Let’s all come together and come up with some real structural changes that are going to make a difference.”
Up in Ellington, Jaime Foster’s opponent, Republican Jen Dzen — a member of a well-known farming family — has posted on Facebook a Senate letter from August asking for a special session to deal with energy bills.
Her own comments on Facebook refer to the Systems Benefits Charge as “new” — which it is not, and mischaracterize the handling of bad debt. After initially agreeing to an interview, Dzen did not respond to further requests.
Foster has won tight races in her two previous elections — two years ago by fewer than 100 votes. While high energy bills are not unimportant, priorities have shifted since she first proposed using ARPA money to help with utility bills.
“I have had conversations about it. And I think the problem with that argument is that people don’t realize what difference that would have made,” she said. “If we start spending ARPA on something that was urgent in this neck of the woods, it would be to save our hospitals.”
She is referring to the crisis situations at Manchester Memorial and Rockville Hospitals due to the stalled sale between their owner, Prospect Medical Holdings, and Yale New Haven Hospital.
“The special session — I would have been there in a heartbeat if I felt like it would have been the right precedent to set in a way that was going to sustainably make a difference,” she said. “I don’t disagree fundamentally with the concept of helping address arrearages. I just disagree with the politicization of rushing it.”
Foster said when she tells constituents she might have to choose between using money to give them a $5 break on their electric bills or saving their local hospitals, “I’ve never heard one person tell me ‘I want to save $5 on my utility bill.’”