OLR Bill Analysis

sHB 6304 (as amended by House “A”)*

AN ACT CONCERNING MUNICIPAL ELECTRIC COSTS.

SUMMARY:

This bill changes the types of service that electric companies must provide to large school district and municipal accounts that have not chosen a competitive supplier. Under current law, electric companies must serve all customers who have not chosen a supplier with last-resort service if their maximum demand is 500 kilowatts or more and they use a demand meter. The bill exempts school districts or municipalities from this requirement, thereby transferring them to the standard service that is provided to small and medium-size customers who have not chosen a competitive supplier. But if the school district or municipality had previously bought power from a competitive supplier it must agree to stay on standard service for at least 12 months. Conversely, the bill switches any customer whose demand is 500 kilowatts or more but who does not use a meter from standard service to last-resort service. By law, last-resort service must be priced to track changes in wholesale market rates while standard service must be priced to reduce volatility.

By law, the electric companies were required to submit an application, by October 1, 2005, to the Department of Public Utility Control for approval of mandatory time of use rates, i. e. rates that vary by the time of day, for accounts with demand of 350 kilowatts or more. The bill exempts school districts and municipalities from these rates.

*House Amendment “A” clarifies the time of use provision and reinstates current law with regard to optional seasonal and interruptible rates.

EFFECTIVE DATE: Upon passage

BACKGROUND

Legislative History

The House referred the bill (File 507) to the Planning and Development Committee, which increased from six to 12 months the time that a customer who had been previously served by a competitive supplier must remain on standard service.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable

Planning and Development Committee

Joint Favorable Substitute