Shays: New Rate Plan Increases Cost But Not Efficiency
By Mandy Kozar
WASHINGTON, Sept. 22 – Residents of southwestern Connecticut could face up to a 25 percent increase in their monthly electric bills without any improvement inj the reliability of the power supply under a new energy rate schedule for New England, the Connecticut congressional delegation warned.
“It’s clearly going to take $13.5 billion, with no guarantee it provides anything,” said Rep. Christopher Shays (D-Conn.) in an interview Wednesday “That’s not a plan, that’s not a guarantee of anything. It’s just a large sucking sound.”
Shays, along with his six fellow Connecticut members of Congress, are united against the “Locational Installed Capacity Plan,” or LICAP, the Federal Energy Regulatory Commission’s proposed rate plan that would raise electricity prices for regions that have high demand and low supply. Proponents of the plan say that it would provide an incentive for companies to build more power plants.
But, according to the delegation, the new plan would substantially increase consumers’ electric bills without increasing the reliability of the power supply to those who need it most.
“What LICAP is trying to do is it’s trying to make sure that there’s reliable electric service in New England and Connecticut,” said Barbara Connors, the regulatory commission’s spokeswoman.
“There are certain areas of Connecticut where demand has increased in terms of electric power, and there hasn’t been a corresponding increase in electric generation to match the increase in demand,” Connors said.
The commission has ranked southwest Connecticut as one of the nation’s top energy reliability risks, with demand for electricity growing faster than anywhere else in the state.
Currently, the southwest quarter of the state is responsible for using half of all electricity consumed by the entire state.
Fearing that Connecticut and New England could be facing blackouts such as those faced by California in the late 1990s, the operators of New England’s power grid first proposed the higher rates in 2004. The commission postponed implementation until 2006 to allow for further discussion.
The Connecticut Department of Public Utility Control opposes the plan, pointing out that there is no guarantee that Connecticut would see the benefit of the increased revenues.
“You’re going to have plant owners getting lots of money, and they don’t have to use it for improvements,” the department’s spokeswoman, Beryl Lyons, said.
Even if new plants were built, Lyons said, the current transmission lines in southwestern Connecticut would not be able to support increased power supply.
“[The power companies] don’t have to add on, they don’t have to increase power supply and nobody is going to build because there’s not enough transmission for new plants,” Lyons said, “So far as we are concerned, it’s purely punitive, at least for Connecticut.”
Although Shays is concerned about electricity demands being met in his district and agrees that higher costs may be necessary, he sees no benefit from rate hikes.
“It’s a model that says if we pay more, more will come into the marketplace,” Shays said, “but it simply may mean that those who are in the marketplace may end up with $13.5 billion more in revenue at our expense, not spent in New England.”
The Federal Energy Regulatory Commission is allowing 10 months before implementation of the plan to allow for continued negotiation.
“We’re using this time to try to knock some sense into FERC and others,” Shays said.
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