Representatives from both United Illuminating and Eversource are responding to comments from various state officials who said Tuesday that Connecticut has to keep pushing for stronger oversight and accountability from public utilities.
State Sen. Norm Needleman and Rep. Jonathan Steinberg, co-chairs of the legislature’s Energy and Technology Committee, were joined by Attorney General William Tong and CT Consumer Counsel Claire Coleman to publicly call for action in response to the performance of the utilities, which they say includes high prices and poor storm response.
The press conference held at the Legislative Office Building came just a few days before the Public Utilities Regulatory Authority is expected to issue its final decision on UI’s application to enact a three-year rate plan that included an additional $131 million from ratepayers. In a draft decision issued in late July, PURA rejected that plan.
Officials from those utilities say state leaders aren’t allowing for the balance UI, and Eversource for that matter, need in order to balance several directives: to secure a return on their investments, ensure public safety, and meet the needs of their employees and the public.
Kim Harriman, vice president of State Government Relations and Public Affairs at Avangrid – United Illuminating’s parent company – said UI presented a great deal of researched information when it submitted its application for a rate case, including infrastructure investments.
“Just because we file a rate case doesn’t mean we stop capital investment,” Harriman said.
Harriman also referred to a recent rally of UI workers outside PURA headquarters earlier this month, during which they expressed concerns about the draft decision and its impact on funding for training, employee compensation, and benefits.
Harriman said UI had offered to go beyond the Friday deadline for PURA to issue its final decision so talks can continue and a possible settlement could be reached, but so far PURA has not responded.
UI submitted a response to PURA’s draft decision earlier in the month.
“Individually, and as a collective whole, the determinations made in the Draft Decision are not instituting a lawful ‘ratemaking method,’ but rather appear as contrived, purposeful outcomes designed with the singular objective of distressing the Company because it is a public utility company. The Draft Decision exceeds all reasonable boundaries for a proper ratemaking decision,” according to the response.
Tricia Taskey Modifica, an Eversource spokesperson, said that while that company appreciates the concerns outlined by the legislative leaders, Tong, and Coleman, it is still concerned about the current regulatory environment and how it impacts the market’s view of Connecticut, which affects investments.
“Our regulators are on record actively discouraging investment in critical infrastructure from water delivery systems to the necessary shift to clean technology to help address climate change. Given the current regulatory climate, the state will continue to lag behind its peer states on clean energy investment,” Modifica said. “We hope this is only a temporary trend in the wrong direction for Connecticut. We’re ready to partner with the state on the necessary energy investments to improve reliability and support the transition to electrification which will decrease the state’s carbon footprint, but that future requires investment and a supportive regulatory environment.”
In the midst of the discussion, Wall Street cautioned what could happen to the credit ratings of all utility companies following the passage of SB 7 this year, which strengthen PURA. The caution the rating agenices issued in July means borrowing to keep up with improvements to the grid could get more expensive. In a separate case, a judge issued a stay against PURA’s decision to decrease rates for Aquarion, which is owned by Eversource, to “preserve the status quo” while the court weighed the case.
Legislative leaders maintain they are simply looking for accountability and for the highest value for consumers.
“It bears repeating. Remember when we had those superstorms, how outraged everyone was at that point in time?” said Steinberg. “Everyone told us that we had to hold the utilities accountable and give PURA the teeth it needed to enforce compliance with the rules in the interest of ratepayers.”
Tong referred to UI’s handling of the former English Station power plant, for which PURA took the company to task in its draft decision.
“If you don’t like that penalty there’s a simple solution: do what you said you were going to do, remediate English Station and the penalty goes away,” Tong said.
In April, PURA voted to implement a performance-based regulation system, making Connecticut one of the first states in the country to establish such a system, in line with the “Take Back Our Grid Act” that was passed in October 2020.
The performance-based incentive system will be linked to utilities’ earnings and profits. That decision by PURA included a framework for implementing the system, setting four regulatory goals, five foundational considerations, and nine priority outcomes to guide future electric utility regulation.