United Illuminating Expected to Increase Rates by as Much as 50%
August 30, 2006
New Haven - John DeStefano & Mary Messina Glassman - Democratic candidates for Governor and Lt. Governor - stood with Attorney General Richard Blumenthal, lawmakers, seniors, and business owners in front of the Department of Public Utility Control (DPUC) in New Britain Wednesday to speak out against an expected 50% rate increase for United Illuminating's (UI) 320,000 customers and say that Gov. Rell's lack of leadership on the state's energy crisis is hurting businesses and families.
The Connecticut Business & Industry Association (CBIA) predicts rates for UI's customers in the Greater New Haven and Greater Bridgeport areas will increase approximately 50% effective January 1st - costing the average family $450 each year. Electric rates for Connecticut Light & Power (CL&P) have soared by more than 70 percent since 2000. CL&P's average electric rate on April 1, 2006, was higher than the average electric rate in every state in the continental United States. CL&P's base rates rose by 17 percent in January and another 5 percent in April. They could rise by another 10 percent by the end of the year. The DPUC will have to approve any new contracts and rate changes.
"This 50% increase would be disastrous for Connecticut's families and bad for business," said DeStefano. "Connecticut is mired in an energy crisis - it already has the highest rates in the nation, squeezing families and costing us jobs. While electric rates are soaring, Gov. Rell has not shown the leadership or a plan to reduce costs. As Governor, I would work with the legislature to lower rates for consumer and families by imposing a windfall profits tax, making Connecticut a national leader in conservation and putting in place a series of detailed measure to lower our energy costs."
Year after year Connecticut's families and businesses are forced to pay some of the highest electric rates in the nation," said DeStefano. "Sky rocketing prices are costing us jobs and hurting our quality of life - it doesn't have to be this way. With real leadership from the Governor's office, Connecticut can do better."
In May DeStefano announced a detailed energy proposal which would lower rates for Connecticut families and businesses, and put the state on a path to become a national leader in energy conservation. "As Governor, I would immediately return $300 million to Connecticut's families and $40 million to businesses by imposing a windfall profits tax on electric generators."
A windfall profits tax on electric generators could be expected to generate $450 million annually, which would be used to lower electric rates by as much as 8 percent. Of the $450 million in savings (based on a 50 percent tax on profit margins in excess of 20 percent), John DeStefano would:
- Use $300 million to lower electric bills by 2007.
- Use $40 million of the money for energy credits to help businesses lower their costs.
- Put $10 million into the Low Income Home Energy Assistance Program.
- Add $100 million to the Connecticut Clean Energy Fund, the Connecticut Energy Efficiency Fund, and other appropriate state energy development and efficiency programs. It's estimated by GDS Associates that Connecticut could save $1.8 billion by aggressively implementing conservation and energy efficiency measures. It's also estimated that this investment would help create more than 75,000 new clean energy jobs by 2015.
By contrast, Gov. Rell has shown no leadership in addressing Connecticut's energy crisis. Her proposal to cut the tax on utility consumption by 25-percent would, according to members of the House Energy Committee, reduce rates for families by less than one percent.
On July 17th Gov. Rell issued a news release identifying "concepts for which the Governor is putting together proposals..." Legislative leaders are still waiting for those proposals. Gov. Rell also promised that, "...she would have recommendations for new energy initiatives within two weeks." Connecticut's families and businesses are still waiting for those initiatives that will help solve our state's energy crisis.
Attorney General Richard Blumenthal said the system by which our electric rates are set should be more open and transparent. "Citizens have the right to an open and transparent process as the John DeStefano administration will bring to Connecticut," said Blumenthal. "The current system is flawed, and requires leadership, courage and conviction to fix it. We need to have an undistracted focus to lowering energy prices and we must do it for our economy and our economic viability."
State Rep. Vicky Nardello - member of the Connecticut's House Energy Committee - says "This increase will be terrible for families and for businesses." Nardello continued, "We clearly need leadership, someone with the courage to say the system needs to be changed."
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