Electric Bills To Increase

HARTFORD (AP) –– Whether because of legislation or market forces, electric bills in Connecticut are set to rise at the end of the year.

If state lawmakers do nothing, a rate cap set by the General Assembly when legislation to deregulate the industry was passed in 1998 will expire –– and consumers’ bills will climb.

If lawmakers enact legislation winding through the Capitol now, the “standard offer’’ will be extended for another two years, but without a ten percent savings imposed by the legislature –– and consumers’ bills will climb.

Prices for the Connecticut Light & Power’s 1.1 million customers and the 350,000 customers of United Illuminating will rise “whether or not we pass this bill,’’ said Senate President Pro Tem Kevin Sullivan.

The standard offer service was established when Connecticut deregulated the industry, allowing consumers to choose their own power companies. The price was set ten percent below levels of December 31, 1996.

But the expected competition failed to materialize. A handful of small players got into the business and then got out.

Deborah Beauchamp, a spokeswoman for CL&P, said the standard offer “was priced so far below the wholesale price of energy, it was a disincentive.’’

Mr Sullivan, D-West Hartford, said the legislation pending now will not necessarily advance deregulation in Connecticut. In its current form, the bill would extend the standard offer to January 1, 2006.

“The jury is still out whether there will be competition,’’ he said.

State Attorney General Richard Blumenthal questions the need to approve what he says is the equivalent of a ten percent increase in electricity costs.

“I think we have a hybrid. We don’t have a system that’s truly regulated or deregulated,’’ he said. “It’s kind of a combination and maybe it has some of the worst of both worlds. We should not make things worse in the name of reform.’’

Beryl Lyons, spokeswoman for the state Department of Public Utility control, said a complicated issue only got more so as lawmakers, regulators, and energy industry lobbyists became involved, turning out legislation in 1998 that is 175 pages long.

“When we set an initial price, we did so predicated on the contract that each of the two companies entered into,’’ she said. “It got so complex. It changed the world as we know it in the electricity industry.’’

The state is not the sole player in pricing decisions. Federal regulators and a recent reorganization plan by ISO-New England, the manager of the region’s power grid, also affect costs.

In addition, no statewide debate about electricity can avoid what ISO-New England calls the bottleneck of southwestern Connecticut’s aging and overtaxed transmission system.

Ms Beauchamp said the legislation would allow CL&P to afford increased transmission costs associated with congestion in southwestern Connecticut. Regulators require the utility to pay generation costs even if plants operate only during a few peak demand periods, she said.

The utility would seek higher rates if transmission costs or the wholesale price of electricity continue to rise, she said.

Mr Sullivan said he will ask other legislative leaders to consider zone pricing, treating western and southwestern Connecticut as a separate area from the rest of the state in electricity pricing.

Zones could serve as incentives for energy conservation by tying consumption to cost, he said.

Whatever legislation eventually emerges this year, it’s “still a leap in the dark,’’ Mr Sullivan said.

“I don’t think anyone expects to see robust competition break out in Connecticut poststandard offer,’’ he said.