The largest electric utility company in Connecticut has announced the price they will charge their residential customers in 2019 for the power generation portion of the electric bill. Eversource Energy, formerly known as Connecticut Light & Power (CL&P), will increase their generation service charge by 18.9% to a rate of $0.10143 effective on the first day of the new year. The previous rate of $0.08530 has been in effect since July 1, 2018. In previous years, large rate increases in the generation service rate charge has resulted in a influx of electricity choice shopping activity in the state at the beginning of the year.
Eversource Energy of Connecticut changes their generation service charge twice a year on the first of January and July. These changes are determined by an auction process where competitive electricity suppliers bid to provide generation service to a percentage of default rate paying customers, or customers who have no selected their own competitive rate plan. Residential customers have the option to switch off of the default rate and onto a competitive electricity rate plan at any time.
Generation service charged by Eversource is the utility’s default rate which competitive suppliers compete against. When the default rate takes a steep increase, as it will in 2019, competitive suppliers are often able to offer lower rate offers and provide savings on the customer’s Connecticut electric bill. Whereas the default generation service charge is in place for six months, competitive suppliers can quickly react to wholesale energy market changes to offer customers more attractive prices.
Customers are also able to switch back onto the Eversource generation rate at any time. However competitive rate plans often have early termination fees if the customer leaves the service of the supplier before the end of the term. Many customers are reluctant to sign competitive electricity contracts for more than six months knowing that the Eversource default rate will change again on July 1, 2019. On the other side of that are savvy consumers who are more than willing to lock in a fixed rate for up to three years as they value price certainty and the possibility that the Eversource default rate in Connecticut might continue to rise again on future rate change dates.
On January 1, 2019 roughly half of residential customers in Connecticut who receive their electric bill from Eversource will experience a 18.9% rate increase. These customers can reduce the rate increase and protect themselves against potential future increases by locking in a low fixed Connecticut electricity rate from a competitive supplier. Competitive rates are listed below from suppliers who have been licensed by the Public Utilities Regulatory of Connecticut.