News from CT GOP
Shop for best electricity prices — Harry Arora, member Energy & Technology Committee
Eversource and UI recently announced that standard service electric rates would be up nearly 50% for the first six months of 2023. However, electricity is a deregulated market, and there are several other suppliers. If you have never shopped for electricity, this might be the year you should look into it by visiting www.energizect.com. Below is how the electricity market works:
Delivery is regulated, and Electric supply is an unregulated market: Your electric service and your electric bill are composed of two parts - delivery and supply. Eversource and UI are the monopoly in their service area for delivery, and the delivery cost is regulated and approved by PURA - a state agency. However, the electric supply is unregulated, and various companies compete to supply you. Eversource and UI are prohibited from competing in the supply business. For 2022, the delivery cost for Eversource was around 12.3c / kWh, while the supply cost was around 12c /kWh.
Eversource and UI are required to provide default service on a pass-through basis: However, if customers do not choose any supplier, the statute requires that Eversource and UI procure electricity for those customers. The statute prescribes supervised auctions for six months to provide that default "Standard service". The standard service for the first half of 2023 was procured via auctions over the last 18 months at high prices. However, customers do NOT have to take the standard service.
Other suppliers on energizect.com may offer savings: You can check the prices from other suppliers on energizect.com and find different competing offerings. While Eversource default rate is 24c for the first half of 2023, some suppliers are currently offering 13.79c for a 36-month contract. While this is a longer commitment, under statute (Public Act 21-117), customers can cancel these contracts without penalty, which makes this price comparable to the six-month default service.
Switching between suppliers takes some time: If one finds a better cost supplier and switches to that supplier, it can take one to two billing cycles for the utility to make the switch. Since the rate increases on default service will take effect from January 1, now is the time to do the comparison shopping.
Regulated utilities may have several problems, but the price of supply isn't one: One may have issues with our regulated utilities (Eversource and UI) regarding reliability and the cost of delivery, but the cost of supply is not their issue because they are prohibited by law to compete in that business. Now, as consumers, it is our job to shop for the best deal and not take the Default Standard Service. The cost of supply is up across the board but that is due to higher natural gas prices and the pipeline constraint to bring domestic natural gas into CT. Click HERE to read my last email which details that policy issue.