Restoring Power: How lawmakers can lower your electric bill

Yankee Institute|David G. Tuerck, Ph.D, Paul Bachman and Michael Head|January 15, 2015
ConnecticutImpact on EconomyEnergy Policy

This report by the Yankee Institute examines the State of Connecticut's mandate requiring electricity providers to get a certain percentage of their power from renewable energy sources. The executive summary of the report is provided below. The full report can be accessed by clicking the links on this page.


Connecticut’s residents are getting a shock from their electric bills.

These higher costs squeeze our budgets, reduce the funds available for consumers’ other spending priorities, and force employers to slow their growth plans and reevaluate doing business in Connecticut. The Renewable Portfolio Standard (RPS), passed by the legislature in 1998 and modified a number of times since, contribute to the rising cost of electricity and reduce the ability of the state’s utilities to decide the best, most efficient, and cleanest way to produce energy.

The first step in reasserting control over our electricity market and reducing prices is to repeal the Renewable Portfolio Standard. 

The following paper, written by scholars at the Beacon Hill Institute at Suffolk University, shows that RPS mandates will cost Connecticut: 

• $1.587 billion from 2014 to 2020, or $453 out of each Connecticut resident’s pocket. That’s more than $1,800 for a family of four;
• 2,660 jobs;
• $283 million in lost real disposable income.

By mandating that utility companies buy a growing percentage of electricity produced by a small list of renewable energy sources, RPS takes a simple problem and complicates
it by limiting our energy consumption choices. Instead of forcing consumers to purchase more expensive electricity, the state could follow the lead of other states and allow consumers to choose their energy’s generation sources. 

RPS is based on the false promise that Connecticut would develop a “green economy” and create local jobs. Instead, RPS has created jobs in Northern Maine and Quebec, where wood-burning biomass and hydropower plants fulfill our state’s RPS mandates.

Higher Prices

Higher energy prices hit the poor the hardest. 

The RPS mandates have pushed electricity rates higher, and will continue to do so as the standards become stricter every year until 2020, when 27 percent of the state’s electricity must be produced by an approved source of renewable power. 

The RPS mandates force electricity providers to buy more expensive energy, because they cannot look for the least expensive option but instead must buy energy from a narrow list
of approved sources. This has put on a drag on investment in cheaper energy sources and instead has promoted investment in sources that meet the requirements of the mandates.
Connecticut is now further behind other states that have built energy sectors that meet the needs of citizens, and have focused on making traditional sources of energy cleaner.

Where are the promised jobs?

Only a small amount of the energy produced to meet RPS mandates comes from Connecticut – we bear the costs but we don’t see the benefits.

State lawmakers told us in 1998 that tax credits and mandated consumption for the “green” energy sector would stimulate growth and lead to more jobs in Connecticut. But they were wrong. The promised jobs, which would supposedly offset the economic loss from higher electricity costs, never materialized.

Instead, our electricity rates continue to go up – even as consumption decreases – and this study shows that only 3.8% of the electricity purchased to satisfy RPS mandates was produced in Connecticut. Most of our money (and those promised jobs) ended up in Maine, where the state’s surplus wood fuels its biomass industry. Our future hope for RPS-approved electricity is based on hydropower from Quebec. 

The cost to develop and prop up the “green” energy sector continues to put a drag both on the state’s budget and on the state’s business community – particularly the manufacturing
sector, which is an important source of jobs and money for the state’s economy. 

These increased costs also hit cities and towns, which have much higher electric bills than the average household. The RPS mandates also mean the state is involved in picking winners and losers in the energy market, as traditional suppliers are forced offline. In the meantime, we are supporting the growth of solar and wind businesses that may need government handouts for years in order to survive. 

Less Control of Our Energy Markets 

The RPS mandates force the state into a predetermined course.

The RPS mandates have reduced our use of sources that can provide energy around the clock and have made us reliant on sources that provide energy only when the climate is just right – because either the wind is blowing or the sun is shining. The unanswered question is what to do when those sources are not readily available, and we no longer have the capacity to meet our needs with more reliable sources of energy.

Finally, because wind and solar energy sources tend to be more distant from population centers, we will likely have to add an additional 4,300 miles of new transmission lines to move energy to our market. That will cost billions of dollars, which will be subsidized by energy consumers. 

Looking Ahead 

To bring costs down for consumers, and to make Connecticut a more competitive state for business, it is time to repeal the RPS mandates.


252391855 Restoring Power How Lawmakers Can Lower Your Electric Bills

January 20, 2015


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