Net-Zero and lowered prices are a priority for United Illuminating (UI), a subsidiary of AVANGRID, according to a recent announcement that it has completed its procurement process for energy supply for the second half of 2023. With a formal filing coming up next month with an updated Standard Service price (which it receives from energy generation companies), the company’s President and CEO Frank Reynolds said, “We are pleased that with our completed procurement we can say with confidence that customers can expect a significant decrease to the generation rate on their bill this summer.”
“While a lower generation rate beginning in July is welcome news for customers, we know that the significant structural issues in the New England energy market that led to this winter’s exorbitant price increases remain,” Reynolds continued, while calling for more accountability and reform required to stabilize pricing and reliability.
Earlier this year, the outspoken Reynolds testified before Congress saying, “The increase in energy supply prices, set by out-of-state generation companies and driven by a broken power market in New England, is harming our customers and hard-working families across Connecticut. Energy supply prices have increased more than 150 percent over the last three years, with the typical Connecticut family seeing a price spike on their monthly bill of nearly $80 this winter. We at United Illuminating and our parent company, AVANGRID, consider this unacceptable, and that is why we’ve worked with the Lamont Administration to take urgent action providing direct financial relief to our customers. However, it is clear we need long-term, sustainable solutions to this problem.” Ned Lamont is Governor of Connecticut.
Reynolds testified that 70 percent of what their customers pay for is energy supply, based on a standard service rate utility companies are required by law to procure under the supervision of the Connecticut Public Utilities Regulatory Authority (PURA) which sets the rates and services of CT’s investor-owned electricity, natural gas, water and telecommunication companies.
“It is worth noting that UI’s transmission and distribution costs have remained flat for the last six years.
Reynolds explained, adding the company is advocating for a rate case to align distribution rates “with the critical investments we need to make to build the grid to support a clean energy future. This is an incredibly transparent, year-long process, with public hearings, testimony, interlocutory orders, intervenors. We’ve already received and responded to 1800 data requests and are incredibly forthcoming in justifying our costs and proposed investments. We are seeking an increase of 4.9% to support the critical investments that will unlock long-term savings and benefits for our customers. Later this month, we’ll begin public hearings and look forward to providing more information about our plan.”
Reynolds and other leaders in the Connecticut energy community have been critical of rate hikes by five out-of-state energy generation companies that added up to “a 107 percent increase implemented with zero transparency or accountability. These are companies that in 2021 pulled in over $340 billion in revenue. For months, we’ve been calling upon the generation companies to open their books, as we do, and justify these costs. We’ve yet to hear a response. This must change.”
According to energy experts, customers in Connecticut pay more for electricity than the national average electric bill.
“The biggest reason comes down to the fact that in the winter we’re pipeline constrained,” said Kenneth Gillingham, Professor of Economics at Yale University. Because of this, Gillingham says, the state has a harder time getting supplied. “We import natural gas from the Midwest, from PA where there’s a lot of natural gas production, and it’s difficult in the winter to get the amount of natural gas we demand to New England, across New York and New Jersey and Pennsylvania.”
Less supply continues to drive higher prices and given that natural gas accounts for half of the electricity in New England (compared to 38 percent countrywide), on average electricity users in CT spend about $272 per month on electricity, or $3,264 per year, 47 percent higher than the national average.
Avangrid advocates for clean, sustainable energy solutions in all the markets it serves, and has been named one of the most ethical companies in the world five times by Ethisphere (the global leader in defining and advancing the standards of ethical business practices that fuel corporate character, marketplace trust and business success.) Ethisphere has a deep expertise in measuring and defining core ethics standards using data-driven insights that help companies enhance corporate character, “and believe integrity and transparency impact the public trust and the bottom line of any organization.”
And while UI is clearly pleased that, at least temporarily, consumer costs for electricity this summer will go down, without new innovations and investments in sustainable energy toward achieving net-zero, this decades-long battle will continue.
Catherine Stempien, President and CEO at AVANGRID, wrote an op-ed for the Hartford Courant in February of this year, saying that with high energy prices and a grid susceptible to rolling blackouts, “The New England energy market is failing our customers and communities.”
In response to Stempien’s op-ed, Kent Knutson, Energy Market Specialist at Hitachi Energy, wrote on LinkedIn, “The great enabler of renewable energy is the high-voltage power grid. Catherine Stempien, thanks for sharing your OP-ED in The Hartford Courant. It is high time the New England Clean Energy Connect (NECEC) gets the full nod of approval. The 145-mile HVDC power line connecting Hydro Québec to Central Maine Power Company will deliver nearly 10 terawatt hours (TWh)/per year, for decades, of much-needed renewable electricity to customers in New England.”
Governor Lamont introduced in September 2022 a new energy investment plan to secure low-cost clean energy to meet Connecticut’s climate goals through the release of the Department of Energy and Environmental Protection (DEEP) 2022 Procurement Plan. The plan builds on the state’s existing investments in a clean energy future by capitalizing on new state and federal actions to build out clean, affordable, and reliable electricity supply.
The passage of both the federal Infrastructure Investment and Jobs Act and Inflation Reduction Act provides significant tax credits and other incentives for clean energy resources, and Lamont’s plan calls for a procurement for solar resources and a procurement for energy storage systems to take advantage of the anticipated lower costs of these resources.
It also calls for regional action on electricity transmission to unlock more, and more affordable, offshore development, and take advantage of substantial federal funding to regional transmission approaches.
“Accelerating the timeline for procurements originally detailed in 2020 demonstrates both the strategic flexibility needed to achieve a 2040 zero carbon target and the critical need to seek the most cost-effective options in the market for Connecticut residents and businesses,” advocates of the plan said.
So while energy may be less expensive in the summer of 2023, let’s hope that by 2040 not only will energy be more affordable, but also more sustainable and even Net-Zero.
