Small businesses could see lower electricity costs under a change ordered by the state Public Utilities Regulatory Authority.

PURA made the change to help small businesses that saw dramatic reductions in revenues during the pandemic.

The change, approved unanimously in late June by PURA’s three commissioners, directs Eversource Energy to develop an optional tariff rate that consists of a volumetric kilowatt-hour distribution rate and a reduced demand charge component.

PURA officials said the optional tariff will help small businesses control their energy costs, and promote energy efficiency and renewable energy programs.

“Any reduction in electricity rates that can keep costs down for small businesses is helpful and prudent,” said CBIA's John Blair.

Small businesses have the option of using their current rate or switching to the new rate, which will go into effect Nov. 1, 2021.

Fixed Costs

Some Eversource commercial customers are charged a fixed monthly rate of $44 for the first two kilowatts of capacity needed, after which they pay another $14.52 per kW of additional capacity needed, based on the highest 15 minutes of electricity usage over the past year.

In addition, the utility assesses a demand charge on commercial customers for providing a constant electricity supply.

That meant electricity costs remained high for many small businesses despite the pandemic-related restrictions and slowdowns cutting usage.

Members of the legislature’s Energy and Technology Committee raised small business electricity costs in a December 2020 letter to PURA and sought relief.

They pointed to a state law passed in 2020 that allows PURA to initiate a proceeding to have utilities consider implementing an interim-rate decrease, low-income rates, and economic development rates.

Committee co-chair Sen. Norm Needleman (D-Essex) was contacted by a dry cleaner in his district who was running machines only once a week during the pandemic.

“I’m happy that PURA is addressing this issue of equity for small business owners,” Needleman told the Connecticut Examiner. “They suffered more than most during the pandemic.”