Lawsuit challenges surcharge on ratepayers

Connecticut electric surcharge adds a $3.50 monthly fee for utility ratepayers, affecting CL&P now and United Illuminating later, as a State Supreme Court legal challenge in Hartford contests authority, exemptions, and impacts on electric bills.

State Sen. Joe Markley calls a new surcharge on ratepayers' bills "a sneaky trick played on utility customers," which is why he personally filed a lawsuit challenging its validity.

The surcharge, a tax on electric ratepayers, was approved last year by the governor and lawmakers. The tax adds about $3.50 per month to an average household's electric costs on their monthly bill. Connecticut Light & Power customers began paying the additional tax January 1. United Illuminating customers will see the tax appear on their electric bills later this year.

Markley, a Southington Republican, says the tax is illegal. The tax replaces a surcharge that was put in place a decade ago to pay back bonds that were used to reimburse Northeast Utilities for the value of generating plants that the company lost when electric restructuring forced the company out of the generation business amid a broader rate dispute in Connecticut. That surcharge expired at the end of 2010, when the money was paid back.

If the tax had not been added, the average CL&P ratepayer would have seen their electric bills decrease by 9 percent or 10 percent, even though the October snowstorm had the potential to push rates higher.

Markley is getting his day in court, as the case is being heard before the State Supreme Court in Hartford while the attorney general considers market changes.

"The tax is unfair for two reasons," Markley has said. "It is levied by a state agency, which doesn't have the authority to do so, and with utility meters in the legislative spotlight, there are six towns that would be exempt from paying the tax."

The exempt towns are Wallingford, Norwich, Bozrah, Groton, Norwalk and Lebanon.

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