Months of public comment, investigations, and controversy culminated with Friday’s decision by the Public Utilities Regulatory Authority, whose commissioners unanimously rejected United Illuminating’s proposed distribution rate increase of $131 million over three years.
The authority approved a $384.9 million annual revenue requirement for UI for one year, starting Sept. 1, representing an increase of $22.9 million from UI’s currently approved base distribution revenue requirement.
Today’s decision results in an average increase in base distribution rates of about 6.6% and an average increase in customer bills of about 2% compared to current levels, according to PURA.
The decision still holds UI’s proverbial feet to the fire for what it calls various performance and management issues, as well as the impending remediation of the shuttered English Station power plant in New Haven. The decision denies the request for a multi-year rate plan in favor of a single year within a new performance-based framework.
UI, at least for now, has not commented on the decision as its representatives are still reviewing it, officials said today.
PURA issued a press release today, laying out its investigatory process that lasted 350 days and included four public comment hearings, field audits and inspections, rounds of pre-filed testimony, and 15 days of in-person evidentiary hearings.
Among the many individuals, state agencies, and community organizations that voiced their concerns about the rate increase, representatives from the state’s chapter of the AARP said they are pleased with the decision.
“The proposed increase would have been another hit to customers who are already facing soaring energy costs as well as high inflation on many necessary consumer goods, impacting the state’s most vulnerable households,” said John Erlingheuser, AARP Connecticut Senior Associate State Director in a prepared release. “We encourage PURA to continue to thoroughly scrutinize the performance of all utilities when considering future rate increase requests.”
PURA Vice Chair Jack Betkoski said he hopes the decision achieves balance between the public’s needs and UI’s.
“I have been here for some time. Nobody is usually happy at the end of a rate case,” PURA Vice Chairman Jack Betkoski said. “But usually we try to come to some common ground, and I believe we did.”
Added Commissioner Michael Caron, “our legislature has taken a more reactive interest in regulatory work.”
Legislators expect more scrutiny from PURA when it comes to the utilities to ensure they are delivering value to consumers while also allowing UI to properly run its business, Caron said.
UI, a public service company and a subsidiary of Avangrid Networks Inc., provides electricity to more than 341,000 residential, commercial, and industrial customers in 17 towns and cities in the state. It had previously increased its base distribution rates in 2016, according to the decision.
The decision allows UI to recover $500 million in expenses for already-completed plant additions, allows for all employee training expenses requested by the company, and approves 47 incremental employees, including 13 in customer service, two for projects, and 21 electric field operations employees. The decision also allows a new economic development discount of 15% to encourage business growth in the state that will be effective July 1, 2024.
PURA established the company’s return on equity (ROE) at 8.63% with an opportunity to earn up to 9.10% if it meets certain conditions and timelines to address performance and management issues. UI requested a 10.20% ROE.
The decision also addressed UI’s customer service practices, which the Office of Education, Outreach and Enforcement investigated on PURA’s behalf.
For example, the EOE investigators noted that, despite the authority requiring UI to pre-screen customers for financial hardship, UI still fails to ask hardship prequalification questions in every call, leading to customers being placed into incorrect assistance programs or customers not being placed in any payment arrangement at all, hardship or otherwise. They said that placement in the correct programs helps to substantially lower payments for customers in hardship situations.
UI can apply to remove that reduction if they can show they are addressing these concerns.
After hearing from the state Department of Energy and Environmental Protection, PURA also found that UI didn’t remediate English Station in New Haven within three years as they were supposed to, adding that the company did not protect the property against vandalism.
Attorney General William Tong also praised PURA’s decision.
“This has been a thorough, tough, and fair process since day one, now producing a strong, pro-ratepayer final decision,” Tong said in a statement. “PURA was right to see through the company’s attempts to distract from the sound reasoning of the decision and to rely on the clear record in this proceeding – United Illuminating sought a bloated, unsupported $130.7 million rate hike, padded with exorbitant guaranteed profits. UI never proved their case.”
