United Illuminating spokeswoman Anita Steeves said UI, an electricity company, believes it is doing a good job. But three New Haven aldermen think the city can do it better.
That is why Mordechai Sandman, Roland Lemar and Carl Goldfield, aldermen of wards 28, 9 and 29, respectively, submitted a resolution at the board’s meeting Thursday to propose that the city start looking into a publicly owned power system, rather than continuing their business with a company taking jobs — and money — out of the city.
UI, a New Haven based electrical distribution company, announced last week that it would be consolidating its seven locations into one, which will be located on more than 50 acres in Orange, Conn. While Steeves said the move will save customers $25 million over the next 20 years, New Haven officials have criticized it as being a waste of energy and contrary to smart growth — not to mention that many city residents are upset over the short term spike in their electricity bills.
Goldfield admitted that creating a publicly owned transmissions system would be a long-term process — “But we have to start the discussions somewhere,” he said.
Both the aldermen and UI representatives said implementing municipal electricity in New Haven would be a significant undertaking. Along with losing $3.4 million in property taxes, the city would need to buy UI’s equipment, which includes poles, wires and transformers. UI, Steeves said, is not in favor of selling. She said calls for municipally owned power are nothing new; cities and towns often back down once they see the costly bottom lines, she noted.
“These things pop up periodically,” Steeves said. “Some towns wanted to just buy their streetlights and found it was too cost prohibitive.”
Goldfield said he realizes past attempts to break away from private companies have failed, but he thinks the new economic climate provides new incentives. By selling bonds and creating a separate authority, public power would become a legitimate option for the city, he said. City officials said municipal power lowers rates because the provider would not have shareholders and bureaucracy to support.
UI’s higher rates are in part because of their regulation by Connecticut’s Department of Public Utility Control, whose stringent reliability standards, Steeves said, increase the bill. Furthermore, their system of buying electricity futures from the state forces UI to increase rates if customers’ demand falls short, Steeves explained.
“We don’t hike up rates lightly,” Steeves added.
Goldfield said he acknowledged that base energy costs are not UI’s fault, but said the lack of competition in the energy industry increases rates for New Haven residents. Sandman agreed, adding that often UI’s reasons for rate hikes, which included higher salaries for its workers and CEO, were unacceptable.
“In this economic climate, should we really be subsidizing someone else’s pay raise?” Sandman asked.
If the city succeeded in this process, New Haven would become one of at least four other Connecticut towns with municipal power authorities.
Nearby Wallingford, for example, has transmitted its own power since 1899. Per month, its average resident’s electric bill is about half that of a UI customer, said George Adair, director of public utilities for Wallingfor. He added that while publicly owned power is a commitment, it is also a great asset because the electricity provider answers to the people: “Local control is important,” he said.
Beyond easing residents’ bills, a municipal power authority could make New Haven more attractive to companies looking for low operating costs, Sandman said. He added that owning its own power equipment would give the city the opportunity to move toward more environmentally friendly electricity generators in the future.
The Board of Aldermen will further discuss the proposition at a meeting Feb. 19.