Why Connecticut Has One of the Highest Electric Rates in the United States
*This article was originally published by Yankee Institute.
Connecticut had one of the highest electric rates in the United States, second only to Hawaii, averaging more than $200 per month in 2024.
The report, published by the U.S. Energy Information Administration (EIA), found the national average monthly bill was $144, with the lowest rates in the Rocky Mountain region, including New Mexico, Colorado, Wyoming, Montana, and Idaho. Utah residents paid the least across the country at $89 per month.
“Monthly electricity bills are the product of two factors: retail electricity prices and the amount of grid-delivered electricity that customers consume,” the report stated. “The average U.S. residential electricity price rose from 16.0 cents per kilowatthour (kWh) in 2023 to 16.5 cents/kWh in 2024.”
Though Connecticut suffers high electricity costs, residents use nearly 20% less electricity than the national average, according to Inside Investigator.
Relief could not come soon enough; however, with less than a week in the current legislative session, solutions remain inconclusive on how to best address Connecticut’s high electricity rates.
As of this article’s publication, one bill offered by Democrats proposes the state borrow $260 million a year to pay for expenses related primarily to the Public Benefits Charge (PBC) — which passes along to consumers the costs of government mandates imposed on power companies for a variety of state energy policies, including “clean” energy.
In summer 2024, the PBC drew residents’ ire as rates rapidly increased, some by 12%. Scott Pearson of Monroe saw his bill jump from $40 to nearly $200; in response, he launched an online petition that has since garnered more than 75,000 signatures demanding Gov. Ned Lamont and the Public Utilities Regulatory Authority (PURA) to “revoke” the PBC.
Since the legislative session began on Jan. 8, PURA has been the subject of much contention, particularly Marissa Gillett’s (successful) reappointment as the agency’s chairman in April, when every Senate Republicans walked out in protest during the vote.
Ultimately, the proposed borrowing is ‘kicking the can down the road’ with taxpayers still on the hook for absorbing the PBC’s costs, but over a 20-year span. Moreover, the current bill fails to provide a roadmap toward ameliorating the affordability issues residents and businesses endure.
This leads one to wonder: why is electricity so expensive in Connecticut? Most, if not all, of the blame can be laid at the Capitol’s doorstep.
The Cost of Power Companies Complying with Government Mandates
Last summer’s PBC increase was a result of Eversource and United Illuminating (UI) recouping hundreds of millions of dollars because they had been forced to buy power from the Millstone Nuclear Power Plant in Waterford, the state’s only nuclear power plant. In 2017, the General Assembly passed a “power purchase agreement” to keep Millstone operational since it provides electricity to 2 million homes not only in Connecticut, but New England, while its closure would have slashed more than 1,000 jobs in the state.
Additionally, during the pandemic, there was a moratorium on disconnecting people’s electricity when they did not pay their bills — meaning those who did pay their bills were penalized for being responsible.
While all other New England states rolled back this policy by July 2021, Connecticut ended the moratorium only last May; therefore, energy companies are recouping the losses from the past several years, which also impacted the PBC’s increase.
‘Going Green’ is Making Connecticut See Red
Then there are environmental regulations the state enforces that also contribute to high energy rates.
In 1998, the legislature passed the Renewable Portfolio Standards (RPS) rules, which severely restrict the ability of utilities to find the cleanest and most efficient means of providing electricity to Connecticut’s residents and businesses, thus creating higher electric bills. According to a Yankee Institute report, Re-Energize Connecticut: Toward Affordable Electricity for All, these mandates will cost the state $1.535 billion from now until 2030 in terms of lost income, higher prices, and lower sales, as well as 1,9230 jobs and $337 million in real disposable income.
More recently, Gov. Lamont has been committed to green energy solutions by signing executive orders, including establishing a goal of reducing greenhouse gas (GHG) emissions of “at least 45% below 2001’s GHG emissions level by January 1, 2030.” He also signed into law requiring that Connecticut gets “all of our energy from zero carbon sources by 2040.”
Yet environmentalists are aiming to enact more protections and regulations through an omnibus bill titled “An Act Concerning the Protection of The Environment and the Development of Renewable Energy Sources and Associated Job Sectors.” The bill, also known as “The Green Monster,” would mandate aggressive GHG reductions, net-zero goals, and a transition to renewable energy sources like wind and solar. However, it argues that these policies are based on questionable scientific premises and impose substantial economic burdens on Connecticut residents.
As explained in the report, The Green Monster: A Review of Connecticut’s Climate Protection Act of 2025, the climate is influenced by multiple factors, not only CO2 emissions, so Connecticut’s unilateral net-zero goals may not be too harsh on personal liberties and the state’s economic well-being without much effect to the environment. Meanwhile, countries like China — which produces large global emissions — cancel out Connecticut’s decarbonization efforts.
Moreover, if the state converted and relied on renewable energy sources like wind and solar, Connecticut could endure lasting blackouts with estimates lasting up to 18 hours. Grid reliability aside, pursuing decarbonization would cost $815 billion through 2050 as New England states would have to build 12,000 wind turbines and 129 million solar panels to meet demand.
In short, because of Connecticut’s stringent environmental goals, residents and businesses will pay more for less quality services.
The Need for More Natural Gas
Another major problem contributing to high energy costs is a lack of natural gas supply. To date, Connecticut has three interstate gas pipelines but according to University of Connecticut (UConn) professor Fred Carstensen only 60% of the natural gas “that flows in CT flows back out, to New York and Rhode Island,” meaning the state only uses 40% of the natural gas it imports.
Yet more than 48 percent of the region’s electricity was generated at natural gas-fired power plants in 2023 and 3.1 million residents rely on it to heat and cool their homes.
Worse, Connecticut has no liquefied natural gas (LNG) reserves, and importing LNG from other U.S. ports is near impossible due to restrictions from the Jones Act, which blocks foreign-flagged ships from transporting goods between U.S. ports. In fact, it’s cheaper to import foreign natural gas than LNG domestically.
To compensate, the state could allow for more construction of natural gas pipelines, like Project Maple: a Canadian-owned pipeline that runs from New Jersey, New York, Connecticut, Rhode Island, and Massachusetts.
Additionally, Connecticut would benefit from the construction of the Constitution Pipeline, which would route natural gas to New England. However, after years of legal battles, the project was blocked by New York in 2020. Then-Gov. Andrew Cuomo appeased environmental activists by blocking the 124-mile pipeline, which would have brought gas from Pennsylvania’s Marcellus Shale into existing pipelines that supply New England.
If New York approved the pipeline, New Englanders would see immense relief, saving $1 billion in energy costs.
So, What Can Be Done?
How can Connecticut lawmakers provide real, lasting relief to ratepayers? The answer lies in free market solutions — i.e., fewer regulations and less restrictive climate aspirations. To be sure, clean air and water, as well as a healthy environment, are worthy goals; but to do so at the expense of peoples’ livelihoods also has to be reconciled.
Green energy sources like wind and solar can be unreliable, potentially leaving residents and businesses without electricity for extended periods. And while a vibrant nuclear energy infrastructure is years — or even a decade — away, lawmakers should consider eliminating the ban on constructing small reactors of which only Millstone has been exempted so far. For the long term, nuclear power offers a way to achieve net-zero carbon emissions, affordable energy, and economic growth — allowing Connecticut to meet its environmental and economic goals simultaneously.
Moreover, Connecticut should not only construct more natural gas pipelines but collaborate with New England policymakers to convince New York to approve the Constitution Pipeline.
Yet state lawmakers are acting more like J. Wellington Wimpy (“I’d gladly pay you Tuesday for a hamburger today”) by borrowing $260 million of which taxpayers will end up paying in the future. That is not real relief. Instead, our residents and businesses deserve a clear and honest strategy, one that will present both short- and long-term solutions.
A good energy policy is the fuel to powering Connecticut’s revival — and it can start today, but only if lawmakers have the courage and willingness to do so.