Connecticut's Ugly Energy Crisis

As readers of this newspaper saw last week in a front-page report, customers of Connecticut Light & Power will soon receive a painful post-holiday gift when their end-of-month bills arrive. The state Department of Utility Control (DPUC) recently approved an average 7.7-percent rate increase on top of a 22-percent rise last year.

Fortunately, ratepayers are not the only ones who’ve become alarmed and fed up. Most members of the General Assembly are very concerned. Some are even hopping mad.

"There can be no doubt that deregulation has proven to be an unmitigated disaster," State Sen. Andrew Roraback (R-30) told The Journal. It’s hard to disagree with that assessment and it’s even harder to find anyone who can defend the Legislature’s 1998 vote to deregulate the generation of electricity while keeping regulatory control over the retail side of the business.

Critics say the deregulation effort, which bears some resemblance to the 2001 crisis in California that helped bring down a sitting governor, has brought about additional costs by creating middlemen — mostly investment banks and energy marketers — that demand a cut of profits. And surging demand has created a need for more electricity, causing companies that generate it to invest heavily in additional capacity. Hence, more price increases to offset capital investments.

What can the Legislature do to bring electricity prices under control? In an interview last week, State Rep. Roberta Willis (D-64) floated the idea of a windfall profits tax, but it’s not clear how that would provide immediate relief. More likely, she said, is a movement toward "connecting price with production" and "getting utilities back into the generation business." That makes good sense.

Another positive development was the determination by the DPUC last month that CL&P should begin phasing in "time-of-use" pricing for residential and small commercial users beginning in January 2009. This will provide electricity customers a financial incentive to avoid using big-ticket appliances during peak hours and thus help the power companies stave off the need for greater capacity.

And as energy experts such as Lakeville’s Roger Liddell have argued consistently, consumers still have the ability to affect prices by reducing their consumption of electricity. And one need not live like a monk in order to do that. Simple steps such as replacing incandescent light bulbs with compact fluorescents can reduce the lighting portion of your bill by 75 percent.

If you can afford it, replace your old refrigerator with a post-2001 model. The modern units are 40 percent more energy efficient than their predecessors. Keep the coils on your refrigerator, air conditioning and dehumidifier clean and so forth.

The silver lining to this sorry mess is that it has brought much-needed attention to where it should have been directed years ago: toward becoming a more energy-efficient society and toward taking a hard look at how we generate our power.

Most members of the General Assembly, which began its session last week, have promised to act quickly to deal with the flawed deregulation disaster. As Roraback put it, "Never was I sold a bigger bill of goods than when we were told that deregulation would be the best thing since sliced bread for consumers and businesses in Connecticut." Hear, hear.