Connecticut Joined By Massachusetts

In Electric Surcharge Action

Hartford — Attorney General Richard Blumenthal filed suit January 4 to stop federal regulators from imposing an unnecessary $800 million surcharge on Connecticut ratepayers. If successful, Mr Blumenthal’s action would reduce the state’s stratospheric power prices by about $200 million a year.

The lawsuit, filed with the federal Court of Appeals for the District of Columbia Circuit, seeks to overturn the Federal Energy Regulatory Commission’s (FERC) decision to impose the surcharge on Connecticut and other New England ratepayers over four years, supposedly to encourage construction of new power plants. FERC will give the money to existing power generators without requiring them to construct new plants.

Joining Mr Blumenthal in the action is Massachusetts Attorney General Thomas F. Reilly. FERC is tying the amount charged each state to the percentage of New England’s electricity they use. Connecticut and Massachusetts together consume about two-thirds of New England’s power.

Attorneys General Blumenthal and Reilly filed the lawsuit under a provision of the Federal Power Act that requires electricity rates to be “just and reasonable.” Mr Blumenthal said that FERC’s plan unfairly increases rates and enriches plant owners, while failing to accomplish its goal of increasing the electricity supply.

“Our suit must stop FERC from inflaming our raging electricity price inferno,” Mr Blumenthal said. “FERC’s special surcharge plan unfairly increases electricity rates, unconscionably enriching plant owners, and failing in its goal of enhancing energy supplies. The so-called transition payments are being added to bills — combined with other charges — beginning this month. FERC’s supposed solution is part of the problem.

“Without our court action, FERC will make this holiday surprise surcharge a limitless money tree for the energy industry. We say the surcharge breaks the law as well as consumer budgets and our economy.

“Congress could never have intended that consumers already paying the highest rates in the continental US — twice the national average — should be compelled to subsidize power plant owners with hundreds of millions of dollars in the name of free market ideology. This system violates the Federal Power Act, which requires that rates be ‘just and reasonable.’ These rates are neither just nor reasonable. The federal bureaucrats behind this plan are out of touch and out of bounds — and should be put out of power,” he added.

Mr Blumenthal noted the owners of the Millstone plants and the Bridgeport coal-burning facility, which already earn profits of 44 to 120 percent, will receive a majority of the $800 million. The attorney general is calling for a windfall profits refund that would return half those plants’ profits over 20 percent to ratepayers.