The war in Russia and the Ukraine has caused Connecticut electric rates to increase by 50% because Connecticut’s main power generation fuel is natural gas.
Both United Illuminating and Eversource were cleared to raise their electric rates to meat the upward spike in electricity prices.
The competitive retail electric providers in the Connecticut market will have to increase their rates as well but don’t have to seek approval from the government to do so.
Europe is demanding Liquid Natural Gas but they can only get it from the Unite States because of the war. The supply and demand issue has raised the primary fuel that generates electricity in the state of Connecticut. Ever heard of, don’t put all your eggs in one basket?
The generation side of the electric bill has gone up by 100% which is the part of the bill concerned with the natural gas generating electricity. The other side of the bill is focused on delivering the electricity over the poles and wires, servicing those poles and wires, and making sure the delivery process is efficient an reliable.
To make matters worse the Connecticut governor outlawed all variable electric rate plans in 2021 which means retail electric providers have no choice but to hege all of their energy they purchase.
Hedging energy is a costly endeavor and most electric providers keep needed revenue by offering a selection of variable electric rate plans to reduce their costs.
With no wiggle room to offer some variable electric rates to keep their fixed electric rates competitive there are fewer options to make electricity affordable in Connecticut.
Now that natural gas generation has doubled in price and Connecticut retail electric providers must hedge all their energy they purchase it puts double pressure on the price of Connecticut electricity.
Donny has been writing about the deregulated energy markets since early 2007. His knowledge has helped consumers lower their electricity cost.