Hartford Business Journal

HARTFORDBUSINESS.COM | SEPTEMBER 2, 2024 9 George LaCapra Jr., president of UniMetal Surface Finishing, said his company will eliminate two positions due to a recent spike in electricity costs. HBJ PHOTOS | DAVID KRECHEVSKY Power Shock Businesses join outcry over spike in CT electric rates; here's how they are responding ering a special session to address the spike in electric rates, but nothing was planned as of press time on Aug. 28. 'It really, really hurts' Like CKS Packaging, many manu- facturers are feeling the pain. On its website, the Connecticut Business & Industry Association (CBIA) said some businesses saw electricity delivery charges "soar as much as 60%" in July from a month earlier, "despite — in most cases — little change in usage." The web post provided some examples, including a Hartford County nonprofit that "was hit with a $13,666 bill for partial July use, a 58% jump over June" despite similar usage; a Watertown manufacturer whose delivery charge jumped 44% to $18,632 in July; and a Windham County manufacturer that saw a 23% increase over its June bill — for just nine days of power use — with similar usage. George LaCapra Jr., president of UniMetal Surface Finishing, which has facilities in Thomaston and Naugatuck, said his company's elec- tric bill will cost $136,000 more over the next year. "That's a significant impact to a business," LeCapra said. "I mean, it's a high-volume, low-margin business." To absorb the increase, UniMetal will eliminate two positions, he said. "We adapt," he said. "This is a constantly evolving business. We're constantly trying to be more efficient and more productive than we've ever been, but when you get unexpected stuff like this, it really, really hurts." By David Krechevsky davidk@hartfordbusiness.com C KS Packaging Inc. is a national plastic container manufacturer with a production facility in Naugatuck. It has 27 plants nationwide that, combined, use more than 300 million kilowatts of electricity per year. According to Mike Bonsignore, chief sustainability officer and vice president of strategic initiatives for CKS, that means a single plant like the one at 10 Great Hill Road in Naugatuck uses, on average, about 11.1 million kilowatts annu- ally — enough to power more than 11,100 homes. That explains why July's sudden spike in the plant's electric bill was so devastating. "If you take the difference between what we were paying and what we're paying on that now, … it has an impact of about $350,000 a year," Bonsignore said. He added that, through the first seven months of 2024, the total cost per kilowatt-hour at the Naugatuck facility is up 59% when compared to the same period last year. Bonsignore and CKS Packaging aren't the only ones howling about the cost of electricity in Connecticut. Residential customers of both Eversource Energy and The United Illuminating Co. (UI) were also shocked in July when their electric bills ballooned — an average of 30% for Eversource customers and 35% for UI customers. Their furor was equalled by the aggravation of executives from other commercial and industrial compa- nies, and especially manufacturers, who say state officials need to address a variety of issues related to energy in the next legislative session to make the cost of power more stable and predictable. Connecticut has the fourth- most expensive electricity in the nation, behind only Hawaii, Maine and Florida, according to a study released in February by Texas Electricity Ratings. Public benefits charge The electric utilities cited a couple of reasons for the dramatic increases, but primarily point to the public benefits charge collected on the delivery side of the bill. The public benefits charge collects money to support renewable energy sources and energy efficiency programs, but now also recoups $160 million in revenue the utilities could not collect during a four-year morato- rium on power shutoffs for nonpay- ment during the COVID-19 pandemic. However, the largest portion of the charge's increase, roughly 77% or $605 million, is related to an agree- ment approved by the state legisla- ture to continue buying power from the Millstone nuclear power plant in Waterford. The increases took effect July 1, and will be collected for 10 months. "All customers saw an increase in the public benefits portion of the bill," said Jamie Ratliff, a spokes- person for Eversource. "So, starting in July, large commercial-industrial customers saw an increase of approximately 57% to the delivery portion of the bill." Small and medium businesses saw a 42% increase to that portion of their bills, she said. The impact of the increase was heightened, Ratliff added, because of the timing, since electricity usage generally rises during the heat of summer. "Usage plays a significant role in this as well," she said. "This past July was the hottest on record for the Central Connecticut region. So, that plays a huge factor in the bill total too." State policymakers were consid- Continued on next page

• Cover