Addressing Connecticut’s High Electricity Prices

Just behind Hawaii, Connecticut has the highest electricity rates in the nation.  Increasing electricity rates have been attributed to higher energy prices (especially for natural gas), energy congestion issues, and federally mandated charges (FMCC).  Residential and commercial customers alike are trying to cope with the escalating prices.

Historically, Connecticut has had high electricity rates.  The state had the third highest rate in the country as of November 2006 and the fourth highest rates as of 1998, when the legislature partially deregulated the electric industry.   You could say high rates are a regional phenomenon because eight of the ten states with the highest electricity rates are in the Northeast.  These include six New England states and New York and New Jersey.

High electricity rates in Connecticut are crippling many businesses, forcing some to close offices or lay off workers.  The May 2010 issue of Chief Executive Magazine rated the best and worst places to operate a business.    Connecticut fell from 39^th in 2009 to 45^th in 2010 and high electric rates have a lot to do with it.  Coupled with high unemployment rates, the outlook for Connecticut hasn’t been good with businesses and residents fleeing the region.

Most of the electricity being generated in Connecticut is by old, large power plants.  Most power plants have a useful life of 40 years and 36% of these facilities in Connecticut are going to be 40 years old or more by 2013.  That means that many of these power plants will be retired in the next few years and new sources of energy must be found.  Aging power lines are also causing energy congestion issues.  This indicates that the state is not producing enough power where and when they need it, therefore having to rely on more expensive out-of-state providers.

Experts have mentioned a few ways to address growing energy costs in Connecticut.  Distributed energy, like solar, is a good choice to fulfill this demand because generation would be at the point of consumption putting less stress on transmission lines.  In addition, the state should try to address these issues by employing energy conservation programs, transmission line upgrades, and the construction of strategically placed power plants to account for growing demand.