Having served as a Commissioner of the New York State Public Service Commission for six years, I know firsthand how contentious energy regulation can be.
Across the Northeast, every state faces tight supply and higher costs of doing business post-Covid. But in Connecticut, the costs of certain state programs required by law to be included on ratepayers’ bills, called the “Public Benefits Charge,” also have contributed to a cost of energy that is consistently in the top five compared to all other states.
Consumers are rightly frustrated, not only by their high bill for energy but also by how complicated it all is. To reduce these frustrations and to address these costs, leaders should be honest, clear, and direct with ratepayers on cost drivers and what is being done to mitigate them.
What is not helpful is for leaders to incite and deepen these frustrations, using loaded language that lays the blame at the feet of the easiest target.
Unfortunately, in the legislative drama over the fate of the governor’s choice of leadership at the Public Utilities Regulatory Authority (PURA), policymakers and some media have allowed themselves to get swept up in a most unhelpful “us vs. them” rhetoric. Over the past few weeks, legislators have called utilities “dastardly,” accusing them of “disgusting” behavior and “bullying” the PURA Chair – without citing any specific examples. Political columns and op-eds accuse utilities of a “craven devotion to profits” at the expense of customers, which requires “rigorous utility regulatory oversight.”
It has been common with the most strident supporters of PURA’s current leadership – as well as those normally more balanced – to try to pit consumers against utilities. Elected officials should explain to their constituents that the interests of utility companies, like any business, must be aligned with customers’ interests much more often than they are opposed.
Let’s put aside these distractions for a moment and look at the big picture. Regulators in Connecticut strive to give ratepayers safe and reliable service at just and reasonable prices. That is the mantra for all utility regulators in all 50 states, not just in Connecticut. State policymakers should be encouraging this goal, because imbalance in the energy system ultimately serves no one.
Supporters of PURA’s leadership and current methodology like to say that the utility companies are now being “held accountable,” and “they don’t like it.” But the facts are more complicated – inconveniently so for those looking for quick hits and easy soundbites.
Fact #1: Utilities have absolutely no control over 60 to 70 percent of Connecticut electric bills, depending on the month. This is the cost 1) to buy customers’ electricity from ISO New England, the only provider of electrons and 2) the Public Benefits Charge required by law.
Fact #2: Utilities are responsible for the Local Delivery section of the bill, which pays for all the investments that bring electricity from the ISO to your home and business. That includes utility poles, electric wires, transformers, substations, bucket trucks, line crews and much more.
Fact #3: By exclusively targeting the “Local Delivery” section of the electric bill, PURA has failed to rein in customers’ rates, which have only gone up since the current chair’s appointment in 2019, even as PURA has cut or disallowed infrastructure investments that are needed to continue the excellent reliability enjoyed by millions of Connecticut residents and businesses.
In sum: PURA’s cuts – to the replacement of aging electrical infrastructure, tree-trimming programs, and other essential reliability and resiliency investments – are exposing customers to lengthier and more frequent outages, even as bills overall continue their relentless upward climb.
PURA ignores that continued reliability and affordability will only worsen if investors lose still more confidence in Connecticut’s regulatory environment, a loss illustrated by the downward credit ratings for utilities across the state last December. Downward ratings equal higher costs to utilities – costs that will eventually have to be shouldered by ratepayers. Why should utility investors choose Connecticut when these concerns don’t exist in other states?
Customers should not have to choose between affordability and reliability, and a good regulator should ensure they don’t have to. It should balance the interests of all stakeholders by creating a regulatory environment that inspires confidence from companies, rating agencies, and customers alike.
Rhetoric from policymakers that undermine this essential balance is both unhelpful and counterproductive. If elected leaders would like to solve some of the real challenges driving high energy costs in Connecticut, this is not the way to do it.
Robert Curry Jr. of Fairfield County was a Commissioner of the New York State Public Service Commission from 2006 to 2012 and served on the U.S. Energy Department’s Electricity Committee for five years during the Obama Administration.