Shelton residents who use United Illuminating (UI) for electricity should see a decrease in their bills beginning Jan. 1, according to the state Consumer Counsel’s Office.
While the standard service price for residential customers in UI territory is rising from 7.7 cents per kWh now to 9 cents per kWh for January to June 2014, that increase will be outweighed by other adjustments to charges contained in the “Delivery Services” portion of their bill, primarily the phasing out of the “Competitive Transmission Assessment.”
In the end, the average UI residential customer should see a net bill reduction of about $2.24 per month, the state Consumer Counsel’s Office said.
Bills to increase for CL&P customers
This is in contrast to customers of Connecticut Light & Power (CL&P), in which case the average customer will see an increase of about $15.64 per month in their bills.
Much of lower Fairfield and New Haven counties are served by UI, with CL&P serving most other parts of Connecticut.
Natural gas impact
The increase in the kWh (kilowatt per hour) price is largely due to rising demand for natural gas, which is used for both heating and the generation of electricity, said state Consumer Counsel Elin Swanson Katz.
Even with the winter price bump into the 9 cents per kWh range, there is still an overall trend of lower energy prices, Katz said.
“In addition, Connecticut is leading planning efforts with our fellow New England states to build more pipelines into New England,” she said. “That is the best option to bring energy prices down and reduce home heating costs as well, but pipelines take years to build.
“In the meantime,” she continued, “we should expect wintertime increases in electricity prices because cold weather leads to high demand for natural gas.”
The rising cost of electricity is not a reflection of poor purchasing or management by either company, and UI and CL&P — in conjunction with the state’s procurement manager — are creatively and competently purchasing power from the regional electricity market, Katz said.
Rather, she said, the rising prices area reflection of market conditions, including the significantly higher prices for power in January and February 2014, as well as lower prices from March to June 2014.
Because of rising electricity prices for some consumers, Katz anticipates that more consumers may consider switching to a competitive electric supplier. “There are definitely opportunities to save money in the next six months, if you find a deal with an electric supplier that is below the standard offer price, and if you lock in a rate from January through June 2014,” Katz said.
For example, if a resident with typical usage identifies a rate that is even 1 cent-a-kWh less than the standard rate, they could save about $7 a month. “It’s not a lot, but for many people, every dollar in their budget matters,” she said.
She cautioned, however, that electric customers should be cautious about signing up for a variable rate offer from a retail supplier this winter as opposed to a fixed rate. “Variable rates often, but not always, reflect short-term conditions in the electricity market,” Katz said. “Consumers need to realize that a variable could go up significantly if it is tied to the electricity market, which is reacts to market forces beyond our control.”
Short-term vs. long-term contracts
Katz noted that electricity rates are expected to drop after the weather warms up, so consumers should also be wary of fixed rate contracts that extend past June 2014 with no cancellation rights.
“We anticipate the standard offer price for both CL&P and UI customers will drop for the period of July to December 2014, following the trend we expect to see in the energy market,” she said. “I therefore recommend that our residents preserve their ability to take advantage of that potential price decrease by only locking in a rate through this June or choosing a longer option with no cancellation fee.”
Customers who are on a variable rate from a retail supplier need to track their electricity bills carefully to be certain that the variable prices are truly in line with market conditions. Customers must pay particular attention for the next several years if they are on a variable rate in the winter, as that will be a risky financial position, according to Katz.
Get more information
Katz suggested that residents check the state’s information website or call one of its energy professionals before making a switch. “It’s often confusing or intimidating when you receive a high-pressure sales call telling you that you can save money on your energy bill, when you don’t know what a good price would be,” Katz said.
“I always recommend that customers check the state website or call the information line before making a final decision, to make sure that they understand the prices and terms,” she said.
Customers can use tools like the CT Energy Info website to get a “reality check” as to whether a generation rate is reasonable at www.ctenergyinfo.com/compare-energy-suppliers, or speak with an energy professional at Connecticut’s toll-free Energy Information Line at 877-WISE-USE.
Information about standard service prices for residential and small business customers is available at www.ctenergyinfo.com/compare-energy-suppliers/2014-generation-rates.
About the Consumer Counsel’s Office
The state Consumer Counsel’s Office is the advocate for all utility ratepayers in Connecticut. The agency seeks to ensure just and reasonable rates and reliable utility service for customers of Connecticut’s electric, gas, telephone, and water utilities and reasonable protection for cable-TV customers. Get details at www.ct.gov/occ.