Eversource, CT, 2 other states discuss ways to try to keep electricity costs down

An online hearing held Tuesday, involving representatives of the three states Eversource Energy serves, brought out suggestions on how the electricity-distribution company can mitigate price spikes.

The highest increase in recent years went into effect at the beginning of this year in Connecticut, with prices from power suppliers rising from 12.1 cents to 24.2 cents per kilowatt hour, a 100% increase that has brought loud protests from consumers and legislators.

While Eversource called the recent rise, largely caused by the war in Ukraine, a “dysfunctional market,” the company presented a chart that showed a relatively stable price history dating back to 2004.

Aside from the current increase, the only other spike was in 2014-15, when a polar vortex brought significantly colder temperatures to New England.

Eversource serves Connecticut, Massachusetts and New Hampshire. All were represented Tuesday. Marissa Paslick Gillett, chairwoman of Connecticut’s Public Utilities Regulatory Authority, led the hearing.

Claire Coleman, Connecticut’s consumer advocate, said one way to even out electricity prices would be by increasing the number of times per year that power is purchased from generation companies, known as laddering. Massachusetts buys its residential electricity twice a year, while Connecticut has four opportunities to even out the average cost of power. New Hampshire purchases semi-annually with no ladders.

“My understanding is that the expectation was the shorter lead time would reduce prices, but the actual pricing variation is dominated by changes in the energy market, as we’re seeing, and there’s no clear trend that we’ve seen that later procurements will be less expensive,” she said.

She added that pricing shifts have been “outside anyone’s control due to our reliance on natural gas and particularly [liquefied natural gas]. And, of course, … the Russian war in Ukraine drove up the cost of gas nationally.”

Europe and the United States are now competing for LNG, raising the price.

According to Eversource, the current New England fuel mix is 45% natural gas; 23% nuclear from Millstone in Waterford and Seabrook in New Hampshire; 16% imports via a Canadian pipeline; 10% renewables; and 6% “other,” including oil.

The company said New England needs a “bridge fuel supply,” to help it transition to clean energy over the next 10 to 20 years. But building new infrastructure is “costly, litigious and slow,” according to Eversource.

Both Connecticut and Massachusetts restructured their electricity markets — Connecticut did so in 1998 — to allow for greater competition. Now, Eversource distributes but does not generate electricity. However, most customers rely on Eversource’s standard rate for electricity rather than competitive companies.

James Shukerow, director of electricity supply for Eversource, said the cost of power is “a winter problem; it is not a summer problem. The reason it’s a winter problem is we rely upon essentially natural gas being transported and to New England that comes across natural gas pipelines. Many of these pipelines were built by the natural gas companies to provide essentially residential heating.”

While there is “plenty of capacity during the summer months … unfortunately, during the coldest days during the winter months, that pipeline capacity is limited.”

While the state representatives and Eversource said there were ways in which they could work together to mitigate energy costs, state Sen. Norman Needleman, D-Essex, and Senate chairman of the Energy and Technology Committee, wasn’t completely satisfied.

“What I do believe strongly is that the circumstances that we faced in the last 12 to 15 months were quite unique, but they demonstrated sort of this weird anomaly in the market that demonstrated just how vulnerable we are to a risk premium,” he said at the conclusion of the hearing.

“What I hope is that we can take what we’ve learned and take this particular circumstance into account as we consider what we do going forward on standard service to make it better and more resilient to the risks that the market offers,” Needleman said.

“At this point, all things are on the table as far as I’m concerned, because as a state senator representing 100,000 people, I am not comfortable putting my residents at risk and they are definitely, and I think we need to understand that we need to do everything we can to mitigate that,” he said.

Eversource spokesman Mitch Gross issued a statement Tuesday that said, “Today’s meeting was an excellent opportunity to collaborate with state agencies, lawmakers and other key stakeholders across our service territory to identify ways to address historically high energy prices in New England. Our presentation today helped to explain how we procure power on behalf of our customers and how global events and demand have led to the current volatile energy supply market, driving up power supply costs across the region.”

He added that power prices are passed on from generators without a profit to Eversource. “We realize any increase is a terrible burden for our customers and we’re eager to explore better methods to help keep energy costs down,” Gross said.

Ed Stannard can be reached at estannard@courant.com.