Connecticut regulators to review electric companies' mandatory time-of-use rate applications

On April 10, 2025, the Connecticut State Legislature introduced Senate Bill 1560, a significant piece of legislation aimed at reforming the state's electric rate structure. The bill proposes the implementation of mandatory time-of-use (TOU) rates for electric distribution companies, a move designed to address the growing demand for energy efficiency and cost-effective pricing strategies.

The primary objective of Senate Bill 1560 is to establish fixed rates across 24-hour cycles based on projected seasonal demand, particularly targeting peak usage hours from 4 PM to 7 PM on weekdays. During these peak periods, the bill stipulates that rates must be at least three times higher than those for off-peak hours. This pricing strategy is intended to encourage consumers to shift their energy usage to off-peak times, thereby reducing strain on the electrical grid and promoting more sustainable energy consumption practices.

Key provisions of the bill include a requirement for electric distribution companies to submit applications to the Public Utilities Regulatory Authority (PURA) for the establishment of these TOU rates. The applications must demonstrate that the proposed rates reflect the actual cost of service and justify the implementation based on customer impact and utility system benefits. Additionally, the bill outlines a monthly revenue reconciliation mechanism to ensure that any discrepancies in revenue collection are addressed in subsequent billing cycles.

The introduction of Senate Bill 1560 has sparked notable debates among stakeholders. Proponents argue that the bill will lead to more equitable pricing and incentivize energy conservation, which is crucial in the context of climate change and rising energy costs. However, opponents express concerns about the potential financial burden on low-income households and the complexity of understanding TOU rates, which may lead to confusion and unintended consequences for consumers.

Economically, the bill could have far-reaching implications for both consumers and utility companies. By encouraging off-peak energy use, it aims to stabilize energy prices and reduce the need for costly infrastructure upgrades. Socially, the bill seeks to promote energy equity, but its success will depend on how effectively it addresses the needs of vulnerable populations.

As the legislative process unfolds, experts suggest that the bill's passage could set a precedent for similar reforms in other states, potentially reshaping the landscape of energy pricing across the nation. The next steps will involve hearings and discussions within the legislature, where the bill's provisions may be further refined in response to stakeholder feedback. The outcome of Senate Bill 1560 will be closely watched, as it represents a critical step toward modernizing Connecticut's energy framework and addressing the challenges of a rapidly changing energy environment.