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Executive Summary
Rising electricity prices are an obstacle to climate action in many US states. Continuing to pursue ambitious decarbonization goals while ensuring affordable electricity to residents and businesses will require bold policy shifts, with solutions that differ across regions.
This report explores specific challenges to decarbonization and electricity affordability in Connecticut, as well as opportunities to decarbonize more affordably. Connecticut has among the highest electricity prices in the nation and a binding commitment to achieve 100 percent zero-carbon electricity by 2040.
The report identifies the following key headwinds:
- Connecticut has limited local fuel resources, relatively high electricity delivery costs, and numerous public policies financed through ratepayer charges. As a result, electricity prices in Connecticut are nearly twice those in nearby Pennsylvania.
- Electrification of vehicles and building appliances, barriers to new generation, reduced federal subsidies, expected increases in natural gas prices, and ongoing grid investment needs are likely to keep electricity prices elevated in the years ahead.
- State planning scenarios envisioned offshore wind supplying about half of Connecticut’s power by 2040. But the costs of offshore wind have risen sharply, and projects are facing delays or cancellations amid growing federal government opposition.
Based on an analysis of the costs of clean electricity programs (which are small relative to total retail rates), the report identifies the following list of potential opportunities to advance decarbonization goals more affordably. Because Connecticut is deeply integrated into regional electricity and infrastructure networks, progress will require collaboration with neighboring states:
- Extend the contract for the Millstone Nuclear Power Plant beyond 2029, even if on considerably less favorable terms. While Millstone has contributed to recent price increases, it’s likely to reduce costs going forward compared with realistic alternatives.
- Accelerate grid-scale solar deployment and reduce the costs of rooftop solar for ratepayers. Rooftop solar electricity is compensated at roughly three times the rate of grid-scale solar.
- Reduce duplication among programs that pursue overlapping goals. For example, the state could gradually expand the renewable portfolio standard (which costs a typical household about $6–$8 per month) to include all zero-carbon sources while reducing the costs of cap-and-trade permits (which cost about $4–$7 per month) that currently add little incentive to further reduce emissions.
- Increase access to low-cost energy imports. For example, new transmission could further connect New England to carbon-free generation sources, including hydropower from Québec. Counterintuitively, additional natural gas pipeline capacity could support affordable decarbonization goals if paired with policies that ensure declining natural gas demand over time.
Ultimately, the value of these opportunities will depend on factors beyond the scope of this study, such as project financing structures and local community impacts. Given the severity of current headwinds, however, achieving affordable, decarbonized electricity may require openness to certain policy options that have previously faced significant economic or political barriers, both in Connecticut and across the country.
