Electric Reform Bill Would Let Utilities Generate Power Again

 By Susan Haigh Associated Press

HARTFORD — New legislation aimed at lowering electric rates and developing more power for the future would allow Connecticut’s two utilities to get back into the power generation business after about eight years of only delivering electricity.

Proponents of the bill believe reversing one of the major reforms of the 1998 restructuring law will give the state a better handle on skyrocketing electric rates and tight supply. Both Northeast Utilities and United Illuminating, which now deliver the power to customers, are regulated by the state.

“I want to regain state control,” said Representative Vickie Nardello, D-Prospect, vice chairman of the legislature’s Energy and Technology Committee. She said greater state oversight will ultimately lead to lower prices and greater public scrutiny.

“To me, it’s a no-brainer,” she said. “State control is preferable to the market.”

The energy committee voted Tuesday to consider several bills that make up this year’s energy reform plan. A public hearing is planned for February 13.

Ms Nardello said the panel is still willing to consider other ideas that are not included in the bills, such as an excess profits tax on power generators and a power authority.

Many state lawmakers are dismayed by the lackluster results of the deregulation law, which was approved by lopsided margins of 126-17 in the state House of Representatives and 27-7 in the Senate in 1998. They claim it has not delivered the promised low prices and competitive electricity market in Connecticut.

Rates jumped by 22 percent last year for customers of Connecticut Light & Power, a subsidiary of Northeast Utilities, and will rise by 7.7 percent this year. Customers of United Illuminating in the New Haven and Bridgeport areas will pay 50 percent more beginning this summer.

Representative Steve Fontana, D-North Haven, co-chairman of the energy committee, said this latest package of reforms attempts to plan for the state’s long-term energy needs. While it includes a few ideas on how to cut people’s energy bills now, such as a proposed rebate program, it is mostly focused on the future.

“There is no silver bullet,” Mr Fontana said. “We’re reasonably confident we’ve come up with silver buckshot.”

The latest energy reform legislation includes many of the provisions included in last year’s energy bill, which died due to lack of action. It includes tax exemptions for energy-efficient products such as furnaces; new bond funds to make state buildings more energy efficient; more money for fuel assistance programs for the needy; and permission to create energy improvement districts where companies can generate and share electricity.

The plan also calls for setting aside $94.4 million to replenish the state’s Clean Energy Fund and Connecticut Energy Efficiency Fund, which develop and invest in clean energy initiatives and conservation efforts.

Also, lawmakers want to enact a program based on a California initiative that encourages electricity customers to conserve energy with cash rebates on their bills. NU and UI ratepayers who use 10 percent less electricity or more in 2007 will qualify for a 5 percent rebate. If someone saves 15 percent of electricity, they receive a 10 percent rebate. For 20 percent savings, they receive a 20 percent rebate.

As currently drafted, the program would not apply to customers of municipally owned utility companies.