In a drive for more revenue, Connecticut Gov. Dannel P. Malloy on Wednesday proposed a new arrangement to spur companies to sell cheaper electricity to about 800,000 ratepayers.
The plan, which Malloy said could bring in $80 million, is intended to steer customers into less expensive electricity purchase plans. Details have yet to be drafted.
Connecticut electricity customers can choose their power suppliers. Less than half the state's ratepayers have accepted offers from other companies, which sell electricity touted as more environmentally friendly or less expensive. The rest buy a so-called standard offer, which is the electricity sold by Connecticut Light & Power and United Illuminating, the state's two largest utilities.
Malloy's plan calls for companies to bid for the right to sell electricity to customers on standard-offer plans. The winning bidders would guarantee that power would be sold at 5 percent reduced rates.
Spokesmen for CL&P and UI said the utilities had not yet studied Malloy's plan and would not comment.
Rep. Lonnie Reed, the House chairwoman of the legislature's Energy and Technology Committee, said it's not yet clear how Connecticut would auction the right to provide the lower standard offer pricing, but Malloy said the auctions could produce $80 million in state revenue.
Malloy's plan says ratepayers would save about $65 a year.
The high cost of electricity has vexed Connecticut governors and legislatures for years. The state deregulated utilities more than a decade ago, but the cost of power soared despite promises of cheaper electricity. Consumers and businesses complained loudly to legislators.
Soon after Malloy took office in January 2011, he and the General Assembly enacted legislation intended to put pressure on electricity prices. The state got into the procurement business, working with utilities to buy power and required a revamped utility regulatory agency — not electric companies — to assess future electric demand and how best to meet it.
The legislation also established an agency to finance zero-emission projects such as solar and wind power.
Malloy also is seeking to spur consumers to switch to natural gas, which is enjoying a boom in production. Prices are relatively low, which is narrowing the gap between standard-offer energy prices and other consumer purchase plans, said Daniel Esty, Connecticut's commissioner of energy.
The governor's latest plan is intended to move more ratepayers into the marketplace, making it more competitive, he said.