In his bid to block Gov. Ned Lamont’s quest for a third term, state Rep. Josh Elliott, D-Hamden, is resurrecting an idea from an earlier progressive era: public power.

Elliott, who is waging a populist campaign in the Democratic primary, has pledged to break up Eversource’s and United Illuminating’s near-total control over the distribution of electricity in Connecticut by allowing cities and towns to take over portions of the electric grid and operate it themselves as public utilities.

A handful of towns already operate under such a model, he notes, and have done so for more than a century at rates that are often lower than that of their for-profit counterparts.

“We know it’s popular, but you have to have everybody rowing in the same direction,” Elliott said.

Elliott said his plan would involve rewriting Connecticut’s eminent domain laws to make it easier for a municipalities to acquire parts of an existing utility’s service territory and all of the existing infrastructure — such as utility poles, wires, transformers and substations — necessary to deliver power to customers.

Under current law, the government has to pay “just compensation,” typically determined to be fair market value, in order to purchase those assets. Instead, Elliott wants to allow the government to be able to pay the lower book value on those assets, or what the utility originally paid, minus depreciation. That would make the cost of a public takeover more viable, he said.

But skeptics of Elliott’s plans say there is little precedent in the modern era of municipalities, or even states, wresting control from private for-profit utilities.

San Francisco and Boulder, Colo., are among the cities where officials have recently tried, without success, to establish their own local electric utilities. In 2023, voters in Maine rejected a plan to create a statewide power authority by more than a 2-1 margin.

“It’s something that you periodically see in different parts of the country, and you know, with different motivations,” said Paul Patterson, an energy analyst with Glenrock Associates. “I think more recently, because of the affordability issue in general that’s sort of sweeping the country, you hear about more in the context of that.”

Despite growing interest in the idea, Patterson said that successful examples of municipalization are few and far between.

“It’s not an easy thing to do, let’s just put it that way,” Patterson said.

What would it cost?

In addition to the immense cost of buying out a utility’s assets — which likely amount to tens of billions of dollars across Connecticut — critics say that forcing a utility company to sell is all but certain to prompt legal challenges. Other practical considerations could complicate such an effort, such as how towns would make up for the millions of dollars in tax revenues that are currently paid on utility property. (By law, most nonprofits and government entities are exempt from paying property taxes.)

During a press conference last week, Lamont issued his own proposal to require that electric utilities seek regular approval to continue operating in Connecticut but stopped short of calling for a public takeover.

“Josh Elliott is selling Connecticut families a costly illusion on energy,” Lamont campaign spokesman Rob Blanchard said in a statement Thursday. “His eminent domain proposal would trigger years of litigation, force municipalities to build utility operations from scratch and eliminate valuable local tax revenue. Instead of lower electric bills, residents could face higher taxes and years in court.”

Even Elliott said that many of the details of his plan have yet to be worked out.

In an interview with the Connecticut Mirror earlier this month, Elliott said that he had no estimate for what it would cost to purchase even a portion of Eversource or UI’s service territory at book value, or how much that would differ from the fair market price. Elliott said that municipalities could issue bonds to cover the cost of the purchase and then pay those debts back over time at lower interest rates through the revenues collected from customers.

In addition, to avoid a sudden loss of tax revenues, Elliott said that public utilities could enter into a payment in lieu of tax agreement with their local municipality.

But Elliott also said that he has yet to identify any towns that have publicly expressed an interest in setting up their own utility or expanding an existing one. In a text message Thursday, he said those conversations “are happening” but that officials are hesitant to speak out in the midst of a primary campaign.

“The thing ultimately that is important for me to impress upon is that this is very possible. The only thing that makes it seem impossible is that you are fighting against an exceptionally wealthy corporation that has monopoly capture and has so many people on their payroll,” Elliott said in an interview.

In separate statements this week, representatives for both Eversource and UI said the companies have no plans to sell off portions of their service territories in Connecticut.

“Supporters of a government takeover of the electric system like to make it sound simple,” UI spokeswoman Angela Baccaro said in a statement. “In reality, it would shift billions of dollars in costs and substantial financial and operational risk directly onto the people of Connecticut — with no guarantee of lower rates or better service. Customers would still be responsible for the same supply costs and state-mandated charges on their bills, while also taking on new costs tied to acquiring, financing and managing the system.”

Sarah Paduano, a spokeswoman for Eversource, echoed many of the concerns raised by UI and added that municipal utilities are subject to many of the same forces, such as high supply costs, that contribute to Connecticut’s high cost of electricity.

“It is important to note that Eversource’s land, buildings, equipment and franchise rights are property rights protected under the United States Constitution, requiring the government to provide just compensation before it can take any property,” Paduano said.

“We have not seen any detail besides public statements and broad comments on these policy ideas, and we cannot comment on them,” she added. “We are committed to pursuing all angles that will meaningfully lower costs for our customers while taking into account the complex realities of our industry, and we welcome ideas that reasonably balance both of these objectives”

The creation of public power utilities peaked in the 1930s and then dwindled in subsequent decades as many smaller utilities folded or were absorbed by private companies. Roughly 20 new public power utilities have formed in the last quarter century, mostly in smaller towns, according to Ursula Schryver of the American Public Power Association.

The most prominent example of public takeover of a power company in recent history occurred in 1998, when New York’s Long Island Power Authority purchased the assets of the Long Island Lighting Company for $2.5 billion — and billions more in debt. (LIPA currently contracts with a private company, PSEG, to operate the grid and sell power to customers.)

Elliott also pointed to the example of Winter Park, Fla., a city of about 30,000 people that bought out its private electric utility for $42.3 million in 2003. Since then, the city has touted its success in burying most of its wires while keeping rates competitive with other utilities.

Schryver said that the biggest barrier for municipalization is often opposition from private utility companies and their investors, who can try to drag the process out in the courts or wage a public relations campaign against the effort. The pushback is often strongest in larger cities, she said, where utilities can earn more profits from a larger customer base.

“They have a lot of money, and they throw a ton of money at these efforts to defeat them, and they are quite often successful in defeating the measure,” Schryver said.

Even unsuccessful efforts to break away from a private utility can put pressure on utility officials to come to the negotiating table and improve service, offer lower rates or agree to other concessions, Schryver said. For example, Boulder’s push to form a municipal utility ended with the local utility, Xcel Energy, agreeing to reduce its carbon emissions.

“Just having that pressure is often enough to get the community what they want,” Schryver said.

Public power in CT

Public power in Connecticut currently exists through seven municipally-owned electric utilities that together serve about 77,000 customers. The typical electric bill for those utilities is about 28% less, on average, than either Eversource or UI, according to the most recent public data on electric rates.

David Meisinger, the chief executive of the Connecticut Municipal Electric Energy Cooperative, said the high prices typically fetched in utility acquisitions, as well as lack of willing sellers, have historically served as barriers for the expansion of public power.

In addition, he said that existing municipal utilities were exempted from having to participate in many of the state-mandated programs that are paid through the public benefits charge when Connecticut deregulated its energy markets in 1998. Any attempt to expand municipal electric service beyond their existing territories would remove that exemption, he said, and costs of those programs would be passed along to their customers.

The most recent example in Connecticut of a municipal utility taking over a private for-profit electric utility was the 1995 sale of Bozrah Light & Power to Groton Utilities for $5.4 million. Meisinger said that acquisition involved a small family-owned company that went into the sale voluntarily.

“It takes not only political will up front but a sustained political effort and support from voters, and then if you can get all of that, it also costs a lot of money,” Meisinger said.

Even if city or group of towns managed to successfully acquire a utility, he added, officials would be left with the day-to-day task of keeping the electricity flowing to thousands of their constituents.

“You have to know how to do it,” Meisinger said. “CMEEC members have been doing it for decades, and some for over a century, and so they’ve been able to sort of perfect it. They have a good sense of what they’re doing, they know their system, and you can’t assume that that would be the case if just any random municipality went through this.”

Despite Connecticut’s limited track record with public power, there is one recent example of a public entity in the state seeking to take over a private utility company.

Last year, Eversource announced plans to sell its local water company, Aquarion, to the South Central Connecticut Regional Water Authority in a deal worth $2.4 billion. (Officially a quasi-public entity, the RWA is publicly owned and overseen by a board made up of representatives from each of the towns within the utility’s service area.)

The deal quickly drew scrutiny from a wide range of public officials who argued that the new Aquarion Water Authority lacked proper oversight from state regulators and that the costs of the transaction would be passed along to customers. Among the critics was Democratic Attorney General William Tong, who called the deal “a costly loser.”

Elliott said that he too opposses the sale, on the grounds that the combined water utility would be too big even in the public’s hands.

“I think, generally speaking, when you have monopolization and big organizations getting bigger, it always comes with the promise of reduced cost because of increased efficiency, but really what happens is increased consolidation of power, which means that they control the market, which means that they can charge whatever they want,” Elliott said. “Generally speaking, I abide by the Teddy Roosevelt model of being anti-trust, anti-monopoly and doing what we can for organizations not to get too big.”

Elliott said that while he would not be opposed to the state attempting to take over part or all of a utility’s territory through the creation of a public power authority, the model he is proposing is for a town-by-town approach.

The role of the state, he said, should be in changing the eminent domain laws to keep towns from “overpaying” for pieces of the utility.

“That is the single biggest thing a governor has to fix, because it is what hands the monopoly its leverage,” Elliott said in a text. “That is why we need a robust eminent domain law to address out-of-control profiteering.”

Schryver, of the APPA, said that most successful municipalization campaigns in recent years have involved the use of eminent domain and condemnation proceedings. The first step in the process, she said, is for the local officials to conduct a feasibility study to determine what it would cost to take over the utility and whether the effort would result in similar or lower rates.

In most cases, she added, the government ends up paying somewhere between the book value and the fair market value to purchase the utility’s assets.

“I think it’s definitely worth looking at options and exploring what the benefits of public power are,” Schryver said. “And then the communities should make the decisions that that make most sense for them.”