Electricity overhaul bill was a fantasy

As often has been reported lately, Connecticut has the highest electricity costs in the country except for Hawaii. For practical purposes that makes Connecticut’s costs the highest, since people in Hawaii can lounge on the beach all day and eat pineapples, sustenance in Connecticut requiring more ingenuity. High electricity costs have been destroying Connecticut’s business and industry.

The Democratic majority in the recent session of the General Assembly realized that something had to be done. With characteristic insight it decided to raise taxes on electricity, postponing the expiration of most of a user fee that had compensated utilities for generating plants they had sold under the compulsion of state law. Figuring that hardly anyone would notice, Gov. Rell, a Republican, went along. So now state government and municipal governments are financed in part by an electricity tax.

Then the Democratic majority passed a bill purporting to overhaul the electricity business generally. The bill would have expanded the Department of Public Utility Control, directed it to try to reduce electricity rates by 15 percent, subsidized solar power projects, created a state agency to purchase and sell electricity, and regulated the electrical consumption of appliances sold at retail. This time the governor vetoed the bill as too vague and far-reaching.

Maybe something could be gained by the government’s purchase and sale of electricity and even by government’s generation of electricity. In some places it has been done well. Connecticut has a few small and successful municipally owned electric utilities. If state government’s purchases got big enough, they might leverage electricity prices down generally.

But as even the largest electric utilities around the country have found, the electricity market is frighteningly volatile. So if a government purchasing agency messed up, it could prove catastrophic to taxpayers, and the chance of this happening in Connecticut would seem greater insofar as state government has no experience in the business.

Do any legislators who supported the electrical system overhaul remember the Connecticut Resource Recovery Authority’s loss of more than $200 million in its electricity sales deal with Enron Corp. a decade ago? Why would another state agency in the electricity business be any more competent than the CRRA was?

As long as state government is taxing electricity for general revenue and electricity costs could be substantially reduced just by eliminating the tax, it’s hard to see justification for grand experiments. Solar power is politically correct but Connecticut’s cloudy climate is not suited to it, and the subsidies would raise electricity costs for many years before producing any return, if indeed there ever was any return. No, Connecticut’s most promising alternative energy option is probably hydroelectric power, but there’s no political correctness in that. The fish and the neighbors wouldn’t like it.

Perhaps worst of all, the legislation would have frankly turned Connecticut’s electricity system into a welfare agency, requiring electricity suppliers to offer discounted rates to low-income customers, the cost being recovered through higher rates for everyone else, as if electricity buyers have some special obligation to the poor and as if welfare costs also should be hidden in electric bills so people will blame utilities for them instead of the government.

Actually, this is already happening on a large scale. United Illuminating Co., which provides electricity to the welfare hubs of New Haven and Bridgeport, reports that a quarter of its customers aren’t paying their bills. Connecticut Light & Power Co., which serves most of the rest of the state, won’t be as specific but acknowledges that its deadbeat rate is in the double digits. Many if not most households that don’t pay are fatherless, but state government keeps looking for ways to subsidize rather than discourage child abandonment.

State government recently  did find a way to economize. The Division of Special Revenue (mustn’t say “gamblingâ€� when two words of fancy euphemism are available to government) has eliminated its charitable games inspection unit, six employees who had been checking the honesty of fundraising bingo games, raffles and such sponsored by civic groups and churches. Without the inspectors, the charities sponsoring the games will have to do their own checking and their patrons will have to trust them — or maybe just skip the games and send a donation by check instead.

According to a Democratic legislative aide, this is one of the “tough choices� made in the new state budget. Can Connecticut survive that much caveat emptor?

Chris Powell is managing editor of the Journal Inquirer in Manchester.