In Connecticut, companies across a variety of industries are reporting significant increases in electricity prices this summer, largely due to higher state-mandated social security contributions.

For businesses, electricity costs rose by as much as 60% in July compared to the previous month, although consumption remained largely unchanged. For example:

• A plastics manufacturer with operations across the United States in the state of Connecticut saw the delivery portion of its electricity bill increase by 57% to $62,172 in July, despite usage remaining nearly identical to June.
• A Hartford County nonprofit received a bill of $13,666 for its partial usage in July, a 58% increase from June despite similar electricity usage.
• The public services section of a Hamden manufacturer’s invoice increased 60% in July over June.
• Electricity delivery costs for a mid-sized Watertown manufacturer rose 44% to $18,632 in July
• For a Naugatuck Valley technology company, delivery costs rose 31% in July compared to the previous month, assuming comparable usage.
• Delivery costs for partial months – with similar consumption – increased by 22% for a manufacturer in Tolland County.
• A Windham County manufacturer reported a 23% increase in its electricity bill compared to June – despite using electricity for just nine days, again with similar consumption.

The monthly electricity bills of private electricity customers also suddenly rose sharply. A petition calling on lawmakers and regulators to take action received tens of thousands of signatures within a few days.

Taxes on public services

Connecticut already has some of the highest energy prices in the country, and the recent electricity bill increase is likely to further increase the state’s high cost of living and doing business.

While increased consumption during the hot, humid summer months is a major factor in higher electricity bills for residential and commercial customers, state energy policies are also the reason for this new round of cost spikes.

The cost of public services accounted for up to 60% of household and business electricity bills in July.

Utilities are required to collect this levy, which is a government-mandated fee for energy efficiency programs, solar and electric vehicle incentives, financial assistance, and the purchase of renewable and carbon-free electricity.

The cost of public services accounted for up to 60% of household and business electricity bills in July.

The fee is set by the Public Utilities Regulatory Authority (PUR), which approved the latest increase – which will last for 10 months – to cover a shortfall of hundreds of millions of dollars after it set the public utility rate at zero from 2023.

Tom Guerra, vice president and chief operating officer of CBIA Energy Connections, which provides energy purchasing solutions to thousands of business customers, said that like individuals, businesses are shocked by the higher welfare fees.

“If a company sets an energy price for 36 months, it knows exactly how much energy it needs to factor into its product prices over the next three years,” Guerra said.

“When unexpected expenses arise, such as this dramatic increase in the cost of public services, it blows up their entire cost model and they often find that they are losing money on their production.”

Economic consequences

Energy costs in Connecticut rose 54.6% between 2013 and 2023—one of the largest increases of any state. National energy costs rose 26.3% over the same period.

Chris Davis, head of CBIA’s public policy team, said the continued cost increases and recent spikes in electricity bills reflect “more than two decades of uncertain, unpredictable energy policy.”

“Uncontrolled energy prices and unpredictable fluctuations make the situation in Connecticut more unstable and damaging to businesses, especially small businesses,” Davis said.

“This has a very negative impact on our ability to retain and attract businesses, with significant consequences for economic growth and job creation.”

Davis said high energy costs are “a real factor” for companies choosing to invest in Connecticut.

“We are also facing a decades-long increase in demand and it is absolutely critical that energy policy takes a long-term, sustainable approach to ensure a reliable and affordable electricity supply,” he said.

“Never before has the need for predictable and stable interest rates been greater, especially given that interest rates are already so high.”

Energy policy

Davis said he expects energy costs to be a major talking point in the fall General Assembly race, when all 187 seats in the state legislature are up for election.

“The CBIA has long been committed to correcting deficiencies in the state’s energy policy to reduce costs and improve reliability,” he said.

“We cannot afford to continue down a path of unpredictability and uncertainty – developing and implementing meaningful solutions will be a key focus of our engagement in the 2025 legislative period.”

“Every aspect of Connecticut’s energy policy must be reviewed and reformed.”

Chris Davis of CBIA

Davis added that the CBIA will release its strategic economic competitiveness plan next month, a long-term roadmap to retain and attract investment and talent, foster innovation and build a dynamic economy.

This plan contains concrete policy recommendations to support sustainable development of energy sources and improved cooperation and partnerships between the public and private sectors.

“Every aspect of Connecticut’s energy policy needs to be reviewed and reformed,” Davis said.

“We must work together to develop and implement solutions that meet the long-term needs of our citizens and our economy.”

---

For more information, contact Pete Myers at CBIA (860.244.1921)..