HARTFORD, Conn. (WFSB) – Eversource reported $2.4 billion in losses on its offshore wind investments.

Some politicians, including Energy Committee Co-Chairman State Rep. Jonathan Steinberg, believe those losses are part of the reason electricity bills soared in July.

“It wasn’t supposed to happen like this,” Steinberg said. “I think it’s a reflection of the fact that utilities are suffering right now. They’ve made some really bad investments, like offshore wind, and they don’t have the means.”

Connecticut Eversource President Steve Sullivan says those claims are not true.

“There are no taxes in public benefits that have anything to do with the offshore wind business,” Sullivan said.

In May 2024, WFSB was given a tour of the South Fork Wind project. The 12 turbines power 70,000 homes on Long Island. It was one of the projects that Eversource used to partially own. Eversource has since sold its interest in the project and others, exiting the offshore wind business entirely.

As of July 1, the public benefit tax on Eversource’s bills has increased by 490 percent per kilowatt hour. That fee is partly a catch-up for unpaid electricity bills during the pandemic, but most of the rate hike is to pay the state’s obligation to buy power from the Millstone nuclear plant.

By the end of April, Eversource should be reimbursed for all of this. The rate hike was approved by the Public Utilities Regulatory Authority, or PURA, on a 2-1 vote.

The only state regulator to vote against, Chairwoman Marissa Gilbert, argued the money could have been repaid in 2-3 years instead of just 10 months. Gilbert wrote in her dissenting opinion that Eversource’s cash flow problems from its offshore wind business may be the real reason Eversource struggled to recoup its money within a year.

The I-Team asked Sullivan directly why Eversource wasn’t willing to wait.

“They created the problem by cutting costs for 2 to 4 years, then said why can’t we extend this over a longer period of time? So you would be compounding the problem,” Sullivan said. “None of the public benefit programs or policies have gone away, so these costs will continue this year and next year, and if you don’t pay the outstanding balance, you continue to incur costs and create additional interest. costs.”

Eversource’s offshore wind team no longer exists, so the I-Team interviewed other experts in the field to try to figure out how this all happened.

Kris Ohleth is the executive director of the Special Initiative on Offshore Wind, an independent organization that advocates for offshore wind construction.

“I think it was, you know, a problem in the development cycle and something that hopefully Eversource will continue to do in the future, but the projects are continuing as planned,” Ohleth said.

It’s true that the projects are moving forward without Eversource, and Ohleth explained why Eversource wasn’t the only company that lost money.

She says the unexpected increase in the cost of raw materials combined with rising interest rates has created a difficult environment for offshore wind projects.

“Even half of the interest rate change can be a real challenge, so you can imagine that interest rates reaching 9% at one point was a real challenge for offshore wind developers,” Ohleth said. “So these economic challenges have really found offshore wind to fall on hard times in recent years.”

Richard Sweeney is Associate Professor of Environmental Economics at Boston College. He agrees with Ohleth that the economics of offshore wind projects have changed unexpectedly during the pandemic.

“You know if you had perfect foresight, they probably wouldn’t have done those deals, but they don’t have that luxury,” Sweeney said.

Sweeney believes that when a company loses that kind of money, taxpayers will end up paying somehow.

“That’s just the reality of having a regulated utility. If you make a bad investment, it’s actually the taxpayers who are on the hook,” Sweeney said.

Sullivan disagrees and explains that the offshore wind business has separate ledgers than the company that manages your electricity.

“There is absolutely no connection between the offshore wind business and the public benefit piece,” Sullivan said.

This piece is part of a 5-part series looking at electricity prices in Connecticut.

Part 1: The future of public benefits tax

Part 2: EV Charger Rebate Program

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