Little to Gain, Much to Risk in State Power Authority Idea

A controversial proposal to expand state government by creating a quasi-state agency to procure and generate power may sound like a good idea to some, but a closer look raises a number of questions and problems.

Supporters of HB-6510, which would create a Connecticut Power Authority, are overlooking several key factors that cast serious doubt on the idea. The most obvious of these, with the state budget deficit at an all-time high, is that this is the wrong time to be expanding state government.

Second, because the proposed authority would be buying power using the exact same processes in place in the New England marketplace today, it’s highly unlikely it would be able to beat the current prices, as proponents say.

Further, the energy market is very complex, and it is already well served by the state and public utilities. The creation of the CPA is the equivalent of sending a “rookie” into the field.

In addition, Connecticut has already adopted most of the measures advocates are suggesting.

The DPUC’s experienced staff administers a very efficient procurement process that has garnered praise from the state’s consumer counsel. The proposed authority, on the other hand, would try to operate with one employee—with the probably and pricey aid of many outside consultants.

It’s also interesting that the Illinois Power Authority—which proponents cite as a model for a Connecticut authority—uses the practices for buying power that were instituted years ago—here in Connecticut.

Under the proposed CPA, financing new plants through ownership or long-term purchase would have to be backed by the guarantee of ratepayers or taxpayers—essentially one and the same. With new plant costs ranging from hundreds of millions to billions of dollars, it’s ill-advised to saddle Connecticut ratepayers and taxpayers with such a burden.

It is difficult to see how a power authority would provide any—let alone a clear-cut—advantage in Connecticut’s energy marketplace. Ironically, along with HB-6636 which will prohibit many Connecticut businesses and residents from choosing their electricity supplier, lawmakers seem to be trying to do more to narrow consumers’ power choices and increase their risks.

CBIA encourages lawmakers to reject HB-6510, HB-6636 and other attempts to expand the scope and cost of state government. For more information, contact CBIA at 860-244-1900.