Revenue-rich Eversource, United Illuminating propose up to 50% winter rate hikes
The Connecticut utilities Eversource (NYSE:ES) and United Illuminating (UI) are proposing winter rate hikes of nearly 50%, claiming that global circumstances require the unprecedented increases even though both companies are enjoying multi-billion-dollar revenue streams.
The average Eversource residential electric customer who uses 700 kilowatt hours of power each month would see their costs balloon by approximately 48% or $84.85 over their current monthly bill on the supply portion of the bill, while UI proposed increasing the Standard Service Rate for its residential customers by approximately 43% or $79.24 over their current monthly bill on the supply portion of the bill.
Neither utility is proposing their respective increases to make up for revenue shortfalls ”“ Eversource generated $3.22 billion in the third quarter of this year, up 32.18% year-over-year, while UI”™s parent company Avangrid (NYSE:AGR) generated $1.84 billion in the third quarter, up 15.02% year-over-year.
Both utilities defended their proposed rate hikes by pointing to the Russia-Ukraine war”™s impact on international natural gas supplies as the cause of the rising power costs, and both stated they were willing to work with consumers who will have problems paying their electric bills.
“We”™re here to work with our customers one-on-one on ways to reduce their energy usage and connect them with assistance programs, flexible payment plans or other resources to help them manage their monthly bill,” said Eversource Executive Vice President of Customer Experience and Energy Strategy Penni Conner. “We also remind customers they can compare energy prices at EnergizeCT and sign up with an alternative supplier for their energy supply if they choose.”
“Any UI customer that is having trouble paying their electric bill, or is concerned about their ability to do so in the coming months, should not hesitate to call us,” said Frank Reynolds, President & CEO of UI. “Above all, we are here to help our customers, and are committed to making sure everyone is aware of the tools available, including payment plans, arrearage management programs, and other resources that can help customers manage their energy use and reduce the impact to their bill.”
The proposed rate hikes will need to be approved by Connecticut”™s Public Utilities Regulatory Authority (PURA) and would be in effect from Jan. 1, 2023, through June 30, 2023. Gov. Ned Lamont expressed outrage over the proposed rate hikes.
“This is unwelcome news to close out a year that has been challenging for so many in our state,” said Lamont in a statement. “In the coming days, I will be calling the General Assembly into special session to adopt legislation focused on providing relief for Connecticut residents, including by ensuring our energy assistance program is adequately funded to at least last year”™s level so support is available for electricity and heating oil costs.
“I am disappointed electric distribution utilities are enjoying historic profits at the same time electric generation rates are increasing and customers are experiencing economic hardships, and I call on UI and Eversource to come to the table with solutions that recognize their investors and executives can and should support customers while we work together towards long-term solutions that untether us from the volatility of global fossil fuel markets,” he added.
The U.S. Energy Information Administration issued a report earlier this month forecasting wholesale electricity prices at major power trading hubs would be between 20% and 60% higher on average this winter, with the highest wholesale electricity prices in New England “because of possible natural gas pipeline constraints, reduced fuel inventories for power generation, and uncertainty regarding liquefied natural gas (LNG) shipments given the tight global supply conditions.” The agency also forecasted the U.S. residential price of electricity “will average 14.9 cents per kilowatt hour in 2022, up 8% from 2021,” a situation that is created by higher natural gas prices.