Why Are Connecticut Electricity Rates So High? Connecticut 2025 Research Report Explained

If you’ve opened your electric bill lately and muttered something unprintable, you’re not alone. Connecticut homeowners are paying some of the steepest electricity rates in the country, and it’s not a new problem.

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To dig into the “why,” the Connecticut General Assembly’s Office of Legislative Research (OLR) released a new study in January 2025 titled "Factors Behind Connecticut's High Electricity Rates". It updates their 2015 explainer on electricity costs and lays out, in plain terms, the biggest forces pushing our bills higher. Spoiler: there’s no single villain here, but a whole cast of characters — from global fuel markets to regional transmission projects — all leaving fingerprints on your monthly statement.

Connecticut Electricity Rates in 2025: Where We Stand

Here’s the scoreboard, straight from the OLR report. As of late 2024, Connecticut had the fourth-highest residential electricity rates in the United States, trailing only Hawaii, California, and Massachusetts. Translation: we’re not just high, we’re really high. And it’s not just a Connecticut thing — every New England state plus New York ranks in the national top ten.

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What does that look like for your wallet? While the average U.S. household spent about $144 a month on electricity in 2024, many Connecticut families were breaking the $200 mark. That’s like paying Mercedes prices for a Toyota — same juice, higher bill.

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So yes, the sticker shock is real. And according to the legislature’s research team, the reasons are layered and interconnected. Think of it like insulation in an attic — except in this case, those layers are costs, and instead of keeping you warm, they’re weighing down your bank account.

The 7 Big Drivers Behind Connecticut’s High Electricity Rates

The OLR report identifies seven main culprits. None of them alone explains the problem — but together, they pile onto your bill.

1. Heavy Dependence on Natural Gas

About half of New England’s electricity comes from natural gas. In the winter, that same fuel is pulled in two directions — heating homes and running power plants. When pipelines clog, we end up importing liquefied natural gas (LNG) at premium prices. Throw in global shocks (like the Russia–Ukraine war), and suddenly Connecticut ratepayers are footing the bill.

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Since ISO New England sets wholesale prices based on the last — and usually most expensive — generator needed, gas ends up steering the whole market. When it’s cheap, bills calm down. When it’s pricey, everyone’s bill jumps.

2. Deregulation and Supply Choice

Back in the late ’90s, Connecticut deregulated electricity. Utilities like Eversource and United Illuminating stopped generating power and now buy it on the wholesale market. Customers can stick with “standard service” or shop retail suppliers.

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For years, retail supplier customers actually overpaid — to the tune of $34–$59 million annually between 2015 and 2021. But when utility rates spiked in 2022 and 2023, suppliers flipped the script and saved customers money — $12 million in 2022 and $103 million in 2023. It’s a gamble either way, and regulators are still tinkering with procurement rules to smooth things out.

3. Wholesale Market Rules

ISO New England runs a market where the marginal unit sets the price for all electricity sold. Since that’s usually a gas plant, everyone else — from nuclear to hydro — gets pulled up to the same higher price. Critics argue it inflates bills compared to a cost-of-service model, while defenders say it keeps the market efficient. Either way, for Connecticut homeowners, it means when gas sneezes, your bill catches a cold.

4. State-Mandated Contracts and Clean Energy Programs

Connecticut requires utilities to sign long-term contracts with nuclear, solar, wind, and fuel cell projects. These contracts are meant to stabilize supply and hedge against volatile gas prices.

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But here’s the catch: if the contract price is higher than the market, ratepayers cover the difference. That’s what happened with Millstone Nuclear in July 2024, when its above-market contract added to a rate hike. Over the long haul, these deals are meant to insulate us from gas rollercoasters. In the short term, they can sting.

5. Renewable Portfolio Standards and RGGI

Connecticut law requires a growing share of electricity to come from renewable sources — the Renewable Portfolio Standard (RPS). Compliance costs add up to about 5% of an average bill, a little higher than the national average. Add the Regional Greenhouse Gas Initiative (RGGI) — a cap-and-trade program for carbon emissions — and you’ve got another line item nudging bills upward.

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These policies are designed to reduce our reliance on natural gas over time, but right now, they show up as small but steady costs.

6. The System Benefits Charge

This quiet fee funds programs like low-income assistance and hardship protections. It varies by utility and has climbed in recent years, partly due to extended COVID-era protections. The programs matter, but like splitting a dinner bill with friends, you’re paying for more than just your own meal.

7. Transmission Costs

Finally, the stealth heavyweight: transmission. Between 2022 and 2023, ISO New England utilities spent $11.2 billion on transmission projects, with another $1.5 billion planned through 2027. Consumer advocates say regional transmission rates have doubled in the past decade, and Connecticut ratepayers are stuck covering a hefty share.

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Since transmission costs are set by FERC in Washington, Hartford has no real control. And opposition to new lines means we can’t easily import cheaper power, leaving us boxed into pricier options.

What Changed Since 2015? New Laws and Reforms

Since the last big OLR study in 2015, lawmakers haven’t been idle. A few major moves stand out:

• 2020: “Take Back Our Grid” — passed after major storms, this law forced utilities to improve storm response, issue credits during long outages, and gave PURA sharper teeth.
• 2023: “Strengthening Protections” — expanded consumer protections and gave regulators new tools like performance-based regulation.
• Other changes include capping fixed customer charges, overhauling solar programs, and increasing the RPS to 40% by 2030.

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These moves haven’t slashed bills, but they’ve shifted the framework — forcing utilities to justify costs, keeping retail suppliers on a shorter leash, and steering clean energy programs toward more efficiency.

Short-Term Pain vs Long-Term Hedge

Contracts with Millstone, offshore wind, and solar often cost more than market power today. But they’re designed as insurance policies: keep reliable, clean power in the mix so we’re not fully exposed to natural gas price spikes tomorrow.

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It’s the fixed-rate mortgage analogy. When market prices are high, you look smart. When they’re low, you look like you’re overpaying. The gamble is whether the long-term stability outweighs the short-term sting.

What’s in Hartford’s Control — And What Isn’t

State levers: lawmakers can shape programs, tweak procurement timing, and protect consumers with caps and rules.

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Out of state’s hands: transmission costs (FERC), wholesale market rules (ISO New England), and global fuel prices.

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In other words, Hartford can steer the boat, but the current is set by bigger forces.

What You Can Do About High Electric Bills

So what can you do while policymakers wrestle with contracts, transmission costs, and energy regulators? The short answer: focus on what’s actually in your control — how much electricity you use in the first place.

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Most of the big cost drivers on your bill — natural gas prices, wholesale market rules, FERC-approved transmission projects — are way above any homeowner’s pay grade. But you do have a say in how much energy your house demands. And the truth is, the cheapest kilowatt-hour is always the one you never have to buy.

Air Sealing: Stop Paying to Heat (or Cool) the Outdoors

Think of your home like a winter jacket. If it’s full of holes, no amount of fleece is going to keep you warm. Air leaks in attics, basements, crawl spaces, and around windows and doors act like invisible drains on your energy use. Your furnace or AC ends up running overtime just to keep up. Sealing those leaks is one of the quickest, lowest-cost ways to make a dent in your electric bill.

Insulation Upgrades: The Workhorse of Efficiency

If air sealing is the zipper on your jacket, insulation is the stuffing inside. Without enough of it, you’re basically letting expensive conditioned air drift right out of your house. A well-insulated attic or wall system keeps your home stable — warmer in winter, cooler in summer — so your heating and cooling systems don’t have to fight as hard. In Connecticut, where electric rates are already high, every unit of energy you don’t use is money straight back in your pocket.

Smarter Appliances and Lighting

Remember when lighting your house meant a bunch of 60-watt bulbs guzzling juice? Swap them out for LEDs and you’re cutting that draw by about 80%. Same goes for appliances: newer ENERGY STAR refrigerators, washers, dryers, and dishwashers use dramatically less energy than the clunky models still humming away in a lot of basements. Upgrades like these might feel small, but they stack up month after month.

Adjusting Habits Without Sacrifice

It’s not all about upgrades. Simple behavioral tweaks can help too. Running the dishwasher only when it’s full, unplugging energy vampires (chargers, old TVs, cable boxes), or setting your thermostat a couple of degrees lower in winter and higher in summer can shave real dollars off your bill without making you miserable.

Think of Electricity as a Leaky Bucket

Here’s the metaphor the OLR report didn’t give you: your house is a bucket, and electricity is the water you’re pouring in. Right now, most homes have holes in the bottom. You can argue about how much water costs per gallon — and trust me, policymakers are — but the fastest way to get ahead is to patch the holes. Air sealing, insulation, efficient lighting, and smarter appliances are the duct tape and epoxy you need to keep that bucket full without constantly paying to refill it.

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Common FAQ's about Electricity Rates in Connecticut

What’s the difference between electricity rates and electricity bills?

The main difference between electricity rates and electricity bills is that rates represent the price per kilowatt-hour (kWh), while bills reflect the total cost you pay. Bills combine usage with supply, delivery, and transmission charges. Connecticut has high rates, but actual bills vary by household consumption.

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Why are Connecticut electricity rates higher than most of the country, but similar to other New England states?

Connecticut electricity rates are higher than most of the country but similar to other New England states because the region shares the ISO New England grid, depends heavily on natural gas, and faces high transmission costs. Regional renewable energy policies also add costs, unlike states with cheaper fuels such as coal or hydro.

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Do seasonal changes affect Connecticut electricity rates?

Yes. Seasonal changes affect Connecticut electricity rates because natural gas demand spikes in winter and air conditioning drives summer usage. Spring and fall often bring steadier rates. However, utilities lock in supply contracts months in advance, so timing can make seasonal impacts more or less severe.

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Are Connecticut electricity rates expected to go down in the future?

Connecticut electricity rates are not expected to go down soon. Costs remain high due to reliance on natural gas and transmission spending. Renewable energy contracts may stabilize prices long term, but short-term bills will likely stay above the national average. Efficiency upgrades offer the best relief.

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How do Connecticut’s clean energy goals affect electricity rates?

Connecticut’s clean energy goals affect electricity rates by requiring 40% renewable power by 2030. Utilities sign long-term contracts with clean energy developers, which can raise bills short term if costs exceed market rates. These contracts also stabilize prices, reduce reliance on natural gas, and lower carbon emissions.

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