HARTFORD, Conn. (WFSB) – Eversource reported a $2.4 billion loss on offshore wind investments.

Some politicians, including state Rep. Jonathan Steinberg, co-chairman of the House energy committee, believe those losses are part of the reason electric bills soared in July.

“It didn’t have to be this way,” Steinberg said. “I think this is a reflection of the fact that public services are hurting right now. “They’ve made really bad investments, like offshore wind, and they don’t have enough resources.”

Steve Sullivan, Eversource’s president in Connecticut, says there is no truth to these claims.

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

In May 2024, WFSB was given a tour of the South Fork Wind Project. 12 turbines power 70,000 Long Island homes. It was one of the projects that Eversource partially owned. Eversource has since exited the offshore wind business entirely, selling its stake in the project and others.

Starting July 1, the public benefit charge on Eversource bills increased by 490% per kilowatt-hour. This fee is partly compensation for unpaid electricity bills during the pandemic, but the bulk of the rate increase is to cover the state’s need to purchase electricity from the Millstone nuclear power plant.

Eversource must be reimbursed for all of this by the end of April. The rate hike was approved by the public utilities regulator, or PURA, on a 2-1 vote.

Chairman Marissa Gilbert, the only state regulator to vote against it, argued that the money could be paid back in 2 to 3 years rather than just 10 months. In his dissenting opinion, Gilbert wrote that cash flow problems from Eversource’s offshore wind business may be the real reason Eversource is struggling to get its money back within a year.

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

“They created the problem by keeping costs down for 2 to 4 years, then said why can’t we extend this over a longer period of time? So you’re compounding the problem,” Sullivan said. “None of the public benefit programs or policies have gone away, so those costs will continue this year and next year, and if you don’t pay the past-due balance, you’ll continue to reduce the cost and create additional interest. costs.”

Since Eversource’s offshore wind team no longer exists, the I-Team spoke with other experts in the field to understand how this all happened.

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

“I think this is an interruption in the development cycle, and it’s something we hope Eversource will continue to do in the future, but projects are continuing as planned,” Ohleth said.

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

He says the unexpected rise in raw material costs, combined with rising interest rates, has created a difficult environment for offshore wind projects.

“Even a half-percentage change in interest rate can be a real challenge, so you can imagine that seeing interest rates get to 9% at some point is a real challenge for offshore wind developers,” Ohleth said. “So these economic challenges have found offshore wind in difficult times over the last few years.”

Richard Sweeney is an 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.

“If you had perfect foresight they probably wouldn’t enter into these deals, but they don’t have that luxury,” Sweeney said.

Sweeney believes that when a company loses that kind of money, taxpayers will eventually pay up in some way.

“It’s just the reality of having a regulated public service. If you make a bad investment, it’s actually the interest payers who are on the hook,” Sweeney said.

Sullivan disagrees and explains that the offshore wind business has separate accounting books from the company that operates your electricity.

“There is absolutely no crossover between the offshore wind business and the public interest part,” Sullivan said.

This study is part of a 5-part series examining electricity prices in Connecticut.

Part 1: The future of public benefit pay

Part 2: EV charger discount program

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