January 22, 2015
By Jeremy Brecher & Rabbi Joshua Ratner
“No good deed goes unpunished.” That, sadly, describes Connecticut’s current energy policy.
Energy efficiency programs have led to substantially lower projections for the state’s electricity consumption and have helped cut in half the rate of peak demand growth for the entire region. But Connecticut’s utilities are being allowed to punish ratepayers for their conservation!
Last year, Connecticut Light & Power sought a 60 percent hike in its residential fixed charge to compensate for reduced demand and indicated that it would pursue even greater increases in the future.
As the state’s 2013 Comprehensive Energy Strategy (CES) points out, “utilities traditionally have made more money when they sell more electricity or gas, creating a powerful incentive to push for less efficient uses of energy or to avoid promoting energy efficiency measures.”
Perhaps even more perversely, Connecticut utilities’ guaranteed rate of return is based on how much they spend on poles, wires, and other physical infrastructure. Unlike normal businesses, the more money our utilities spend, the more profit they make.
We are writing to call attention to this bizarre, counter-productive, and morally repugnant approach to energy policy. As Rep. Lonnie Reed, co-chairwoman of the General Assembly’s energy and technology committee, recently put it, Connecticut should begin “transitioning to a new economic model that values the contributions made by conservation, renewables, micro-grids, and other upgrades” to our electric system.
A first step should be a legislative cap on fixed charges for both residential customers and small businesses. The residential fixed charges for CL&P ($19.25/month) and United Illuminating ($17.25/month) have more than doubled since 2004, making them the highest among major utilities in New England. This is an unfair burden being thrust upon those who can least afford it. We should follow the example of California, where the residential fixed charge was recently capped at $10/month. Connecticut should lead New England in the affordability of its fixed rates, not lag behind all other states.
In addition, we support Rep. Reed’s call for the formation of a working group to explore ways to transform Connecticut’s obsolete energy policy by “reinventing the moribund economic model” and finding ways to “incentivize our electric utilities to embrace change, not sabotage it.”
Fortunately, the working group will find some good ideas in the CES, which recommends what it describes as “decoupling plus”: a “structure of performance bonuses for meeting efficiency targets and/or an enhanced rate of return for meeting policy targets including efficiency goals.” For example, rates could provide encouragement for “shared solar” and other alternatives to centralized generation and distribution. The CES further says that “poor performance should result in a reduction in the base-line rate of return.”
If Connecticut’s investor-owned electric utilities stand in the way of needed reforms or continue to punish energy efficiency with higher rates, we do not have to sit idly by. A State Energy Authority, as proposed in 2009 by then-Attorney General Richard Blumenthal, could create and support alternative means for meeting our energy needs. We could also explore other ownership models that are working effectively across the country, ranging from consumer-owned cooperatives to public power companies owned by municipalities.
Finally, we must take aggressive steps to address the imminent threat of climate change. Connecticut’s Global Warming Solutions Act established the goal of an 80 percent reduction in greenhouse gas emissions by 2050. Any rate structure or economic model must accelerate the shift away from fossil fuels and toward renewables, investing in local jobs and insulating our state from the unpredictable gyrations of the fossil fuel market.
We know that change is daunting, but we are unyielding in our optimism that significant change is possible. Connecticut restructured its electric system via the 1988 “deregulation” that forced the utilities to sell off all their generation facilities. We need a restructuring on at least the same scale today.
This year happens to coincide with the biblical Sabbatical year. This period of time, known as “Shmittah” (“release”) in the Bible, calls for agricultural fields to be left fallow so that those who are in need can gather crops and so that the land itself can be rejuvenated. But, more deeply, it serves as a time to release ourselves from our existing paradigms of relationship to the natural world; a time when we, as contemporary Americans — both secular and religious — can release ourselves from the shackles of inertia and indifference; a time when we can dare to dream about a better, cheaper, and more sustainable energy policy for all of Connecticut. Now is that time.
Jeremy Brecher is co-founder of Labor Network for Sustainability and serves on the steering committee of the Connecticut Roundtable on Climate and Jobs. His latest book is “Climate Insurgency: A Strategy for Survival” (Paradigm 2015).
Rabbi Joshua Ratner is director of the Jewish Community Relations Council of Greater New Haven and part of the statewide leadership team for the Interreligious Eco-Justice Network.