Eversource Rejects Three Connecticut Solar Contracts

Ned Lamont’s administration got a sharp rebuke from one of Connecticut’s largest utilities last month when Eversource informed state officials it would not sign three solar power contracts selected through a competitive state bidding process.

Eversource Deputy General Counsel Duncan R. MacKay sent a letter to the Department of Energy and Environmental Protection and legislative leaders on March 27, announcing the company would decline to execute power-purchase agreements for 54 megawatts of solar capacity. MacKay called the contracts overpriced and warned they would likely push up the public benefits charge that appears on customer electric bills.

“The prospect of committing another $238 million of customer money over the next 20 years is concerning to Eversource and is a clear divergence from a much-needed affordability lens,” MacKay wrote. “Because the pricing for the contracts is over-market and the contracts do not add value to customers in terms of materially increasing available generation supply and offering a pathway to lower generation costs, contract execution does not appear to be in the customer interest.”

MacKay also cited what he described as Connecticut’s lack of a “comprehensive” energy strategy as a reason for the company’s refusal.

DEEP pushed back hard. Spokesman Will Healey called the decision “surprising” given the pressure Connecticut and the broader regional grid face from growing electricity demand. Healey pointed out that the solar projects had scored highest in the agency’s evaluation process, and that Eversource participated in that review without raising any objections along the way.

The DEEP spokesman also landed a pointed jab: Eversource has agreed to sign contracts with Massachusetts for the same projects it now claims are unaffordable or unsupportable in Connecticut. “DEEP is in contact with Eversource to further understand the nature of its concerns and is exploring options to ensure these projects and other current and future procurements can continue to deliver cost effective energy resources to Connecticut ratepayers,” Healey said.

An Eversource spokesperson declined to comment beyond the letter.

The contracts were selected through a multistate bidding process that dates to 2013 and was created to encourage renewable energy development across the region. DEEP announced the latest round of winners in December, after running an expedited process designed to capture federal solar tax credits that the Trump administration is phasing out. The urgency behind that timeline makes Eversource’s last-minute withdrawal particularly disruptive.

Connecticut has set aggressive clean energy targets, and procurement rounds like this one are central to the state’s strategy for hitting them. Solar power-purchase agreements lock in electricity prices over long contract periods, typically shielding ratepayers from fuel price volatility that drives up costs from fossil-fuel generation. DEEP’s position is that the contracts would reduce costs over time, not increase them.

Eversource’s argument cuts the other direction. The company contends the contracts commit ratepayers to above-market prices at a time when electricity bills are already a source of public frustration. Connecticut customers have faced some of the highest electricity rates in the continental United States for years, and affordability has become a recurring flashpoint in discussions between legislators, regulators, and the utility.

What makes the situation particularly awkward is the timing. Eversource sat through the entire evaluation and selection process, saw the results announced in December, and waited until late March to raise these objections formally. That timeline gives DEEP little room to find alternatives before project developers face financing and permitting pressures tied to the federal tax credit schedule.

DEEP says it is exploring options to keep the projects alive. Whether that means finding a different contractual path, seeking intervention from legislative leaders who also received MacKay’s letter, or pursuing some other mechanism, the agency has not said publicly. The situation puts state officials in the uncomfortable position of scrambling to salvage contracts that went through months of competitive review, only to be rejected by the very utility responsible for delivering the electricity to customers.

For Connecticut ratepayers, the outcome of this standoff will matter. The state’s clean energy goals don’t move on their own. They depend on procurements exactly like this one.