August 15, 2024

EV Program Costs Drive CT Delivery Rates Even Higher

Just over a month after the Connecticut regulators approved the large delivery cost increases detailed below they have authorized additional increases in delivery rates for both major utilities in the state.

This time the increases are more modest at ~$0.004/ kWh (or about 3%)  and related to program costs to build out EV charging infrastructure in the state. The new rates take effect on September 1, 2024 and are authorized through the end of April 2025.

Nuclear Costs & Bad Debt Drive CT Delivery Rates Higher

Each year, the utilities in Connecticut file a Rate Adjustment Mechanism (RAM) request with the state regulator (CT PURA) to account for adjustments to costs that are unrelated to their system’s operations or energy supply. The docket for the Eversource/CLP 2024 process is 2024-01-03, while the UI docket is 2024-01-04.

In the documents filed earlier this year by both utilities, they asked for significant increases in delivery rates charged to customers, including the Non-Bypassable Federally Mandated Congestion Charge (NBFMCC) and the Social Benefits (SBC) line items.

The NBFMCC line item represents a bucket of various costs, including those related to the energy contracts with the nuclear power plants in New England. In CLP’s filing documents, they detail how the costs for those contracts rose significantly in 2023, causing a large under-collection during 2023 and driving the need for a more than 3 cent per kWh increase in NBFMCC rates. In UI, the increase in NBFMCC was more modest at 2 cents per kWh. As a reminder, the nuclear energy contracts ensure those power plants have adequate funding to remain in operation; with the lower-than-normal wholesale energy prices during 2023 due to the mild weather, the power plants need significant additional monies from the utilities to maintain the agreed-upon funding levels.

The increase in the Societal Benefits Charge (SBC) is related to increases in the hardship relief program costs, which are related to debt forgiveness for ratepayers who fail to pay their utility bills. It was similar for both utilities at about 2 cents per kWh. We have seen increases in these “uncollectible debt” expenses across the US. Hence, this revision is not entirely unexpected here in Connecticut, where many households struggle with inflation.

Increases for CLP customers vary greatly by rate class, with smaller commercial (rate 30) customers seeing a     ~3 cent per kWh jump in their delivery rates, and medium commercial (rate 35) accounts will see a similar 3 cent increase in usage-based charges. However,  a slight decrease in demand-based charges will offset it. Larger customers (rate 55, 56, 58) will see slight reductions in demand-based components but a roughly 6 cent per kWh jump in consumption-based delivery charges during on-peak periods and an approximately 2 cent increase during off-peak hours.

For UI customers, the increase in SBC applies to all accounts equally, adding 1.4 cents per kWh to your delivery costs. The NBFMCC cost allocations are more complicated, with smaller GS accounts adding over 4 cents per kWh to their delivery costs. In comparison, larger demand-metered accounts will see an increase in their demand-based charges, from less than a dollar per kW-month to nearly 5 dollars per kW-month.