At Connecticut’s General Assembly these days, a debate is raging about consumers’ control over their electric use and costs. On one side, the utilities defend ever higher “fixed charges” on electric bills; on the other, consumers and their advocacy allies push to lower and cap those charges at $10. A fixed charge is a monthly flat minimum charge on a customer’s electricity account that should be an accurate calculation of the minimum, short-term fixed cost of connecting a customer to the grid. High fixed charges hurt consumers by increasing the amount that must be paid regardless of energy use. These fixed charges interfere with benefits from energy efficiency measures and diminish consumer control over energy generation, consumption, and costs.
With the highest residential fixed charges in New England for any major electric utility, Connecticut’s Eversource Energy and United Illuminating continue to increase already high fixed charges and to oppose legislative attempts to lower or cap these charges. In response to inaccurate information distributed by Eversource lobbyists at the Capitol, Acadia Center completed an analysis which shows that significantly more than half of Eversource residential customer monthly bills would decrease if the General Assembly enacts a $10 fixed charge cap, as proposed in a pending Senate bill.
In a May 12th email, an Eversource lobbyist claimed that, “more than half of our customers would see an increase in their overall bill if the fixed charge is lowered,” and that, “a $10 fixed charge is actually more regressive than a $19.25 fixed charge.” However, using information provided by Eversource in its 2014 rate case before the Public Utility Regulatory Authority (PURA), Acadia Center found that:
- All residential customers using less electricity than the average in a given month would pay less if the fixed charge decreases from $19.25, the existing amount, to $10, the maximum allowed under the proposed cap;
- 61% of monthly bills in Eversource’s primary residential rate class fall below the actual average of 730 kilowatt hours per month; and,
- Increasing the residential fixed charge to $25.50 per month—the amount sought by Eversource in its rate case—would increase monthly bills for all customers that use less electricity than the average.
The analysis showed that an overwhelming majority of Eversource’s approximately 1 million residential customers would pay higher bills and would see a decreased incentive to use energy efficiently under the utility’s high fixed charge approach. This analysis rebutted claims by Eversource lobbyists that consumers do not stand to benefit from lower fixed monthly charges.
Acadia Center released its analysis of Eversource’s claims against the fixed charge cap on May 18th. The issue continues to be debated in Connecticut’s General Assembly with a vote hopefully soon to be scheduled in the Senate on Senate Bill 570.
Learn more about fixed charge caps from Acadia Center’s Senior Attorney and Connecticut Office Director Bill Dornbos by watching this panel discussion video: CT Mirror/AARP Google Hangout: Fixed-Rate Cap on Electric Rates