Connecticut residents living in the Eversource service area can expect to pay a much lower August electric bill as the utility company slashed the standard service rate by 23%. Eversource, formerly known as Connecticut Light and Power, will be lowering its generation rate or price to compare rate from 9.604 cents per kWh to 7.421 cents per kWh beginning on July 1. This rate change will apply to all small and large commercial companies that hold a rate classification of Rate 30 and Rate 35. The next rate change is scheduled for December 31, 2020.
Eversource provides generation services to both residential and commercial customers in Connecticut who have not already switched over to a retail electric supplier. The generation rate, also known as the standard service rate, changes every six months. The last time the standard service rate dropped this low was back in 2013 when residential rates were just above 7.5 cents per kWh. Just four years before in 2009, the standard service rate hovered above 12 cents per kWh.
Will the Energy Savings be Short-Lived?
The energy market is extremely volatile. It is not uncommon for Eversource customers to see large swings in the standard service rate. As mentioned above, the standard service rate for residential customers in 2013 was set at 7.57 cents per kWh. A year later, the rate jumped to 9.99 cents per kWh. This is an increase of 32% in a single year!
If we take a historical look at pricing offered by Eversource, it doesn’t look good that the standard service rate will remain below eight cents for too long. Connecticut is known to have high energy prices. From 2007 to 2014 the average standard service rate for residential services was above 10 cents per kWh. During the same period, the standard service rate was below 8 cents only 12.5% of the time. It was above 11 cents 50% of the time!
Energy Choice for Connecticut Residents
Connecticut is one of many states that has deregulated the energy market. Residential and commercial customers have the option to choose an alternative electric supplier for their generation costs. This is good news for those who do not want to be subject to the Eversource ever-changing standard service rate.
Competing electric suppliers offer a variety of rate products to choose from that include long term fixed rates and variable rates. Locking in a three-year fixed rate will protect against any volatility in the energy market for the term of the contract. If the market spikes, the customer will be protected. It’s not surprising a growing number of residents are shopping around and switching to alternative electric suppliers.
To understand the basics of energy choice, read the Energy Choice Guide 101. There are a growing number of platforms that make it easy for consumers to shop and save on their electric bills. Customers shopping for a competitive electric rate should read the terms and conditions carefully to be sure they are comparing apples-to-apples and to avoid any hidden fees from the electric supplier.