The bill aims to address issues with energy procurement and cost recovery.
A new bill proposes creating a new independent agency to oversee electricity rates in Connecticut.
Lawmakers claim it could reduce costs by 40% in the next two years.
A bipartisan group of legislators expressed support for SB 1560 during a press conference prior to a Finance, Revenue, and Bonding Committee hearing.
The bill was marketed as a solution to Connecticut’s exorbitant electricity rates.
The 80-page proposal calls for the establishment of the Connecticut Electricity Procurement Authority (CEPA), an agency tasked with addressing inefficiencies in electricity procurement as well as transmission and distribution cost recovery.
It seeks to align procurement, grid operations, and customer behaviour with the objectives of affordability, reliability, and decarbonisation.
The legislation states that CEPA could “harness in customer and system load data, assist in developing dynamic pricing and competitive market tools to reduce costs, improve infrastructure utilisation through smart electric load growth and lower peak electric demand.”
It would be led by a seven-member board charged with implementing dynamic procurement and recommending “time-of-use” pricing strategies.
Peak hour rates would be at least 300% higher than off-peak.
Senator John Fonfara stated at a press conference prior to the public hearing that the CEPA would play a key role in overhauling Connecticut’s electric system.
He stated that current infrastructure was not designed to support 80% of customers who rely on standard service, and that faith in markets alone “hasn’t worked.”
Fonfara emphasised CEPA’s approach to energy management, citing the Connecticut Municipal Electric Energy Cooperative as a successful example.
Fonfara also cited solar adoption as a reason for declining utility revenues, arguing that CEPA would better integrate solar energy into the grid.
He referred to each home with panels as a “mini power plant” and stated that CEPA would ensure that the power generated was better utilised.
The bill also includes two major funds: one to stabilise interest rates and another to promote smart metre adoption.
It requires the CEPA to install smart metres and directs PURA to launch a public outreach campaign to explain the advantages of time-of-use rates.
While PURA previously approved Eversource’s rollout of smart metres to 1.3 million customers in 2024, the plan’s future is uncertain due to rate recovery disagreements.
CEPA would also oversee a new municipal energy cooperative tasked with developing a plan to reduce standard service costs, which would be funded by the state’s Green Bond Fund.
The bill eliminates the systems benefit charge and replaces it with bond proceeds, which has sparked criticism from groups such as the Sierra Club and the Department of Energy and Environmental Protection.
DEEP warned that the bonds could crowd out other programmes, resulting in higher long-term costs.
It stated that the bill authorises $2.4 billion in new bonds for the Green Bond Fund while capping annual spending at $800 million, which is nearly a third of the state’s current borrowing capacity.
DEEP also expressed concerns about CEPA’s transparency, stating that it would not be subject to the same rules as state agencies and that its responsibilities could overlap with DEEP and PURA.
Environmental groups, solar companies, and other stakeholders spoke out overwhelmingly against the bill.
Many solar companies said that removing the ability to apply solar credits to delivery charges would cripple the solar industry, particularly for low- to moderate-income households.
According to Nick King of Everlast Energy, the change will undermine the economics of residential solar and is a “backdoor attempt to kill” nett metering.
Other solar groups echoed this warning.
However, utilities such as Eversource and United Illuminating backed the bill.
Eversource praised CEPA’s role in supply procurement and the use of bonds to replace the public benefits charge, estimating that customers will save $40 to $50 per month.
Eversource also argued that the bill addresses the underlying cause of rising prices, declining electricity sales, and rising utility costs.
SB 1560, according to the company, will aid in the implementation of smart metres and electrification initiatives.
The House Republican caucus expressed support for the legislation.
Minority Leader Vincent Candelora said it is consistent with the party’s cost-cutting goals, while Rep. Joseph Polletta described the public benefits charge as a burden on families.
Meanwhile, Rep. David Rutigliano stated that his own business had grown by $70,000 and advocated for aggressive rate cuts.
