The definition of insanity is to do the same thing over and over and expect a different result. Connecticut residents have paid among the highest prices for electricity in the nation for too long. Calls by those who benefit from these high prices to keep things the same are certainly self-interested and definitely anti-consumer.
Connecticut has the highest residential electricity rates in the continental United States, according to the latest data released by the U.S. Energy Information Administration (EIA). The same is true for Connecticut’s commercial rates. They are also the highest among the “lower 48” states. This is a long standing problem in our state, and it has persisted even as wholesale power prices across the region have declined significantly due to lower natural gas prices.
Simply put, what we are doing currently is not working for Connecticut’s residents and businesses. That is why calls by existing fossil fuel generators, primarily older oil and natural gas fired power stations, to stay the course and double down on policies that are not working ring hollow. There is a better way.
We all know that it is more expensive to buy a product with a middle man involved. That’s how Connecticut’s electricity markets work today. Our state’s power plants do not sell directly to utilities, much less to individual customers. Instead the current policy leads to power being sold to financial firms, hedge funds for example, so that by the time the power gets to the end user prices are as high as ever at the retail level, even though wholesale prices have dropped notably. When oil prices drop, we all expect to pay less at the gas pump. Why should electricity be different?
Pro-consumer legislation being considered by this year’s legislature would allow the state, at its option, to cut out the middle man. Specifically, the legislation would allow direct sales of carbon free electricity, such as the nuclear power produced by the Millstone Power Station, to Connecticut’s utilities if state regulators determine doing so makes sense for customers and the state’s environment.
Today Millstone represents about half of Connecticut’s electricity, almost all of its carbon free electricity, more than 1,100 direct jobs, and billions in economic impact for the state. This year’s legislation would give the state the option to allow this low-cost, carbon-free electricity to be sold directly to Connecticut utilities without the markup from a middle man. That’s a way to save money for customers and preserve clean energy resources.
The better way is to look for ways to lower prices and to preserve the clean energy and economic benefits Millstone provides today. There’s no mandate, only an option. There’s no handout and no payout, only a way to save customers money.
It’s been a generation since electricity markets were created in New England as the region deregulated its electric utilities. The results speak for themselves, and not in a good way. We’ve suffered high prices long enough. It’s time to look at cutting out the middle man. That’s a proven way to save money and it is what this legislation provides for–nothing more and nothing less.
Kevin R. Hennessy is State Policy Director – New England for Dominion Resources, Inc.