U.S. Senator Richard Blumenthal is calling on the Federal Energy Regulatory Commission to review a fixed rate increase approved by Connecticut regulators earlier this month. Connecticut Light and Power’s $19.25 monthly residential charge marks a 20 percent increase.
In response to approval from Connecticut’s Public Utilities Regulatory Authority earlier in December, state lawmakers filed a bill that would cap future fees at $10. CL&P said that would hamper its ability to perform upgrades and ultimately increase variable rates. Unsure of FERC’s authority over state regulators, Blumenthal isn’t buying the company’s rationale.
“They’re making nine percent or more return on equity,” Blumenthal said. “They have the flow of revenue to upgrade their distribution. That is precisely why FERC’s review is so appropriate because they’re the ones who have responsibility for the grid – for those transmission and distribution costs. They can evaluate whether or not that rationale is bogus, as I believe, or whether or not it makes any sense, which I doubt they would ever find.”
Spokesman Craig Cano says FERC Chair Cheryl LaFleur will respond directly to Senator Blumenthal’s letter, but the agency does not have any further comment. He added that under the Federal Power Act, FERC’s jurisdiction is over wholesale rates of electricity and transmission in interstate commerce, not retail rates.
CL&P originally sought a $25.50 charge saying the money was needed for significant expenses. The company says it looks forward to working with state leaders on the issue. Blumenthal, a Democrat, likened the increase to a gas station charging for pumping gas regardless of the amount.
“Low usage consumers tend to be lower income,” Blumenthal said. “They tend to be our seniors and people of moderate or modest means who use less electricity because they can’t afford more. This fixed rate increase unfairly burdens them.”
Calling on regulators, lawmakers and fellow advocates to lead dialogue around increasing rates instead of electric companies, Connecticut Consumer Counsel Elin Katz says raising fixed charges reduces the economic value of energy efficiency efforts.
“If you increase a fixed charge and you’ve already invested in your measures, you’re in essence saving less money,” said Katz.
Katz says, in general, utilities are increasing fixed rates because they want to guarantee revenue if use declines or steadies. With more than 1.2 million customers, CL&P says it has, like many other service companies, a combination of fixed and variable rates based on how much it costs the company to operate. Saying the company has monopolistic power, Blumenthal noted CL&P’s fixed rate is the highest in New England, followed by Connecticut’s next largest electricity company, United Illuminating. UI has more than 325,000 customers.
In May, a new capacity zone grouping lower Hudson Valley with New York City electric customers went into effect. Despite public and political pressure, including a measure that passed the House of Representatives prohibiting FERC from using funds to implement the new zone, customers in the mid- and lower-Hudson Valley are seeing higher rates. The zone is intended to retain and incentivize more power generators in the region. Additional legislation has been filed to require FERC to publicly report the zone’s impact on consumers.
With companies in Hawaii and Idaho also increasing fixed rates, Blumenthal says FERC needs to act.
“The unwillingness or inability of state regulatory agencies to effectively reign in these fixed charge increases should prompt federal review and action if necessary,” said Blumenthal.