As energy bills soar, Eversource and Millstone point fingers
- Jul 30, 2020 2:23 pm GMT
Jul. 30--Many Connecticut residents are seeing higher energy bills in recent weeks. Their outrage has caused lawmakers to take notice, as well as prompted a public rift between Millstone Nuclear Power Station and Eversource Energy.
Eversource and Millstone blame each other for the higher prices, with Eversource putting the onus on a state-mandated agreement, finalized in 2019, for the utility to use power from Millstone for the next 10 years in order to keep the plant from closing.
Millstone and others, such as state Sen. Paul Formica, R-East Lyme, say Eversource is being disingenuous.
"I think there's some misconceptions, and some of the things that are being put out by Eversource are a bit misleading on this," Formica said during a discussion with radio personality and Day columnist Lee Elci this week. "We see distribution charges going up each and every year, which is something Eversource controls."
Weezie Nuara, Millstone owner Dominion Energy's state policy director for New England, challenged Eversource's assertions in a July 27 letter to legislators. Nuara wrote that an increase in retail rates, effective July 1, "comes from an increase in the transmission service rate charge and an increase in the nonbypassable federally mandated congestion cost (NBFMCC) charge."
"The costs associated with Millstone's power purchase agreements have been incorporated into the NBFMCC charge," Nuara writes. "The NBFMCC charge seeks recovery for 23 different services and programs approved by state and federal regulators. The state's contracts with Millstone are just one of those line items."
In an interview with The Day, Millstone spokesman Ken Holt said the power purchase agreement, or PPA, in place is fair.
"The contract price is a great deal for Connecticut's consumers," Holt said. "The power is being sold at a flat rate of 4.999 cents per kWh (kilowatt-hour), which is the lowest price for a carbon-free resource in Connecticut published to date, and 32% lower than the lowest standard offer price ever from Eversource, which is 7.375 cents/kWh as of July 1."
Holt added that the contract went into effect in October 2019, nine months before Eversource's latest rate increases.
"The other thing Eversource doesn't seem to be talking about is that the transmission charge went up with this increase," Holt continued. "That is totally under their control."
State regulators approved the 10-year contract between the owner of Millstone and utility companies in 2019, effectively ending the yearslong political, regulatory and environmental battles to keep the plant operational. Gov. Ned Lamont stepped in to help secure the deal between Dominion Energy, Eversource and United Illuminating.
The contract calls on the utilities to buy half the plant's output over the next decade. Virginia-based Dominion had threatened to shutter the 2,100-megawatt Millstone unless the state let it compete against higher-priced solar, wind and hydropower.
For Eversource's part, spokesperson Tricia Modifica said the company was concerned about parts of the PPA and expressed as much in comments to legislators "when it first surfaced."
"The July 1 bill includes about $124 million in costs directly tied to this agreement and represents about 90% of the increase in the Nonbypassable Federally-Mandated Congestion Charge on customers' bills, the delivery side of the bill," Modifica said. "The second reason bills may be higher is that average customer use increased by 36% from May 2019 compared to May 2020. This jump reflects the reality of more customers working from home and running air conditioners, pool filters, dehumidifiers and other appliances to help them stay cool."
Modifica added that there was an increase in transmission costs from lower-than-expected loads over the New England transmission system compared to last year. The lower loads were primarily due to milder weather, which increases the service charge that covers the fixed cost of running the electric grid paid for by customers, Modifica said.
Eversource has touted its flexible spending plans. For example, a COVID-19 payment plan allows customers up to 24 months to pay off back balance. Modifica said to contact Eversource at (800) 286-2000 to learn more.
Taren O'Connor, director of legislation, regulations and communications for the state Public Utilities Regulatory Authority, said state energy guidelines are a chief culprit of the hefty consumer bills.
"While many charges that comprise the delivery portion of a customer's bill do indeed stem from the cost of physically transmitting the electricity and maintaining the aging electric grid, the costs associated with the state's energy-related public policy goals, as well as costs that are regulated by the federal government, are also reflected in the delivery charge section of a customer's bill," O'Connor wrote in an email. "On July 1, several of these bill components underwent an administrative adjustment, and coupled with the higher usage due to the extreme weather in July, customers are experiencing higher-than-expected bills."
PURA confirmed Wednesday that it is set to investigate Eversource price increases.
Ratepayers see soaring bills
Norwich resident Sasha Dale described her surprise at receiving a higher bill for May.
"I just moved my business location from a studio in Norwich to my studio in Mystic," Dale wrote in a Facebook message. "With the move, I had to switch over to Eversource. One active month of working in my old studio, which is the same size space, my bill would be around $75-$90 a month." After one month in her new space, and without working there because the business has been closed, Dale said she received a $221 bill.
Dale had used Norwich Public Utilities as her energy provider in the past. She said when she called Eversource to complain, she was told nothing can be done to change the charges.
Brittany Jordan of Gales Ferry said she received a $417 bill, which shocked her, as she's used to paying $160.
"The delivery is nearly double the usage. It's insane and should be criminal!" Jordan wrote in a Facebook message. "For me the usage price isn't a problem, it's the insane delivery fee. How does it cost almost double to just deliver the electric I'm using?"
Jordan said she tried to reach Eversource on multiple occasions, and after having been on hold for more than an hour, she gave up.
Almost a dozen Facebook commenters detailed similar situations in response to an inquiry from The Day posted in the Waterford Connecticut Open Forum. Eversource has acknowledged anger and confusion from customers in its public comments.
Eversource fees do not affect customers of Norwich or Groton utilities, which are municipally owned and purchase wholesale power through the Connecticut Municipal Electric Energy Cooperative.
Norwich Public Utilities had no electric rate increase for the new fiscal year that started July 1, and no increase or new fees in customers' monthly bills, NPU spokesman Chris Riley said Tuesday.
"Everyone's bill in July is based on their usage," Riley said. "And with warmer weather and a lot of people working from home, usage is up for a lot of people."
In a presentation to the Norwich Board of Utilities Commissioners on Tuesday, NPU staff estimated residential power usage was up by 5% in June, reflecting more people working from home. That projection has remained constant through much of the COVID-19 shutdowns. July usage, when air conditioners were heavily in use, was not immediately available.
The July NPU electric bill includes the electric rate of 13.7 cents per kilowatt hour, plus a purchased power adjustment for variable wholesale costs of power at 3.3 cents per kilowatt-hour, a 0.2-cent energy efficiency charge to fund the utility's energy efficiency audits and rebate programs and a 0.01-cent per kilowatt-hour charge to fund NPU's electric capital improvements.
Daniel Bouges, Groton Utilities' manager of communications and community outreach, said Groton Utilities has been able to keep rates essentially the same. Its average customer bill has increased 46 cents a month compared to the prior year, totaling a $5.52 increase for the full year.
"As a matter of course we continually reinvest in transmission and distribution infrastructure, which requires periodic rate adjustments," he said. "Fortunately for our customers, Groton Utilities is able to leverage CMEEC's rate stabilization fund to minimize customer impact."
CMEEC is a public corporation allowing municipal electric utilities in the state to join together in providing electric power. CMEEC CEO Dave Meisinger explained why town-run utility providers haven't had the same bill increases as Eversource in an email Wednesday.
"CMEEC takes a long-term view with respect to power supply planning, with a focus on mitigating abrupt rate changes and advocating for consumer affordability," Meisinger wrote. "As a non-profit public power entity with a high credit rating, CMEEC has access to relatively low-cost capital, which tends to reduce certain costs. We also benefit from being accountable to our members alone, rather than to a separate group of owners/shareholders. These benefits are passed on to our members, and tend to be reflected in lower retail electric rates."
State House and Senate leaders have called for hearings to address the high energy bills. Republican and Democratic lawmakers alike sent a letter to PURA dated July 28 asking that it "suspend the increase to the components of the Eversource delivery rate that increased on July 1, including the transmission charge (TAC), the electric System Improvements (ESI) tracker charge, and the non-bypassable federally mandated congestion charge (NBFMCC)," the letter reads.
Day Staff Writers Claire Bessette and Kimberly Drelich contributed to this report.
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