Examine Your Electric Bill: It's Enlightening!

Since de-regulation of electric power occurred a few years ago, the power lines, like the phone lines, have been open for competitive bidding.

This can be discerned by examining your monthly power bill where you can see charges for generation and charges for transmission—the two biggest costs of any electric bill.The generation portion of your bill is open for competition and since the generation rates have just dropped as of January 1, 2011, it is worth taking a look at your bill.

Let’s take a look at my Connecticut Light & Power (CL&P) bill as an example. From December 1, 2010, through January 3, 2011, we used 952 kilowatt hours (kwh) at our house, substantially more than usual due to all of the Christmas lights, candles, etc., associated with the holiday season.

865.50 of those kwh were billed at the rate of $0.103000 per kwh—in other words, 10.3 cents per kwh. This was the rate charged through December 31, 2010. 86.50 of those kwh were billed at $0.094000—in other words, 9.4 cents per kwh. The lower rate took effect on January 1, 2011 and is reflected in the second charge listed above, which covers the first three days of January.

It’s nice for the Connecticut consumer to catch a little break for the electricity bill, especially since we pay the highest electrical rates in the country; however, as with most consumer products, I found that it pays to shop around. I noticed in my AAA magazine called Journeys that there was an advertisement for lower electrical rates for the generation portion of my bill, so I called them up. The AAA-related deal turns out to be with a company called Rescom Energy. They quoted me a price of $0.0872 –8.72 cents per kwh—for the first month then 9.021 cents thereafter. A better deal, but I thought I’d continue to look around.

My next call was to Dominion of Pittsburgh, PA (800-400-5574). They quoted me a price of 8.69 cents per kwh guaranteed through next December 31st. This is about 10% less than the new CL&P rate, so I asked them to sign me up (see photo). I received a statement in the mail from them within 3 days. They needed my CL&P account number, my service reference number (found halfway down the page), and the customer name key—generally the first four letters of your last name. All of this info is readily found on your last electric bill, so have one ready if you plan to jump ship. There may very well be better deals out there than this one, but I was content with the result and chose to go no further.

Another aspect of your CL&P bill that is worth a look can be found on the back page. There you will find a CTA charge per kwh. I asked the friendly agent at CL&P exactly what this stood for. CTA stands for “Competitive Transition Assessment.” Okay, translate please. Essentially, it was a charge approved by the legislature over a decade ago that paid for bonding that was necessary to compensate electric utilities for the mandatory sell-off of their generation facilities under de-regulation—referred to in the business as “stranded” costs. Interestingly, the payment for the bonds expired last spring. Then why, I asked, are we still paying this charge—we who already pay the highest electric rates in the country? She told me that CL&P opposed the continued charge, but the CT state legislature, through Senate Bill 484 last spring, continued to have CL&P collect the charge and forward it to the state of Connecticut to help pay down the deficit!  Basically, the CTA charge on your electric bill is a disguised tax. Essentially, the state decided to issue 10-year revenue bonds that will pay down the deficit by collecting the CTA charge on the electric bills of the state. Apparently, the thinking went something like this: Since they are already used to seeing this charge on their bill, they won’t realize that it’s supposed to end in the spring of 2010, so let’s just continue to charge them and use the money for another purpose-- paying down the deficit. The electric companies fought this bill to no avail. Then Attorney General Blumenthal opposed this bill, as did Governor Rell. Nevertheless, the bill passed.

 What I find particularly galling about this bill is the fact that the burden for paying the hidden tax in the form of the “CTA” charge falls in a disproportionate way upon CL&P customers. The charge will appear only on the CL&P bill until 2014; after that, United Illuminating customers get to join us. These are 10-year bonds, so expect to pay the hidden tax until the spring of 2020.