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Connecticut's Energy Issues
What is electric restructuring?
As a result of industry restructuring, competitive suppliers now own the generating plants, and energy is bought and sold in a wholesale market on a regional basis. Local utilities (like CL&P) only purchase and deliver the power. But electric restructuring has not brought the lower prices that many hoped for.
1990s
The Connecticut Legislature decides that companies should be allowed to sell electricity and compete in the open market.
1998
The legislature passes a law that opened the electric generation market to retail competition, effective Jan. 1, 2000.
2000
Customers are automatically placed on Standard Offer with its built-in rate reduction of 10% (10% below the 1996 rates which were the same rates in 1999). The positive was that Standard Offer provided protection, via a price cap, for the consumer (10% below the 1996/1999 rates). The negative was that the cost, for the electric supplier, to purchase power in the wholesale market was close to, or higher, than the Standard Offer rate.
2003
The Revised Electric Restructuring bill (Public Act 03-135) was signed into law on June 27, 2003, and created the Transitional Standard Offer (TSO) Period (2004-2006). This replaced the Standard Offer period (2000-2003) and was in effect from January 1, 2004, through December 31, 2004. In order to encourage more electric suppliers to do business within the state, the TSO removed the 10% rate reduction. The TSO was designed to ensure stable rates, encourage the development of renewable energy and continue an orderly transition to a competitive marketplace beginning in 2007.
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