Attorney General William Tong had some strong words for United Illuminating as his office this week filed a response in opposition to the company’s recent request for an interim rate increase, arguing that, if approved, it would set a bad precedent for any utility that would use such requests to make extra income.
Both UI’s request for an interim rate increase and Tong’s opposition were filed with the Public Utilities Regulatory Authority.
“The Attorney General urges the Authority to reject this motion as unmeritorious, if not entirely in bad faith,” the response states.
UI is requesting that PURA provide $14 million annually in incremental base revenues starting Feb. 1, 2024. The filing follows PURA’s August rejection of UI’s proposed distribution rate increase of $131 million over three years in favor of a $22 million increase over one year. UI, which is a subsidiary of Avangrid, is also appealing that decision in Superior Court.
In his response, Tong argues that PURA has already thoroughly examined and made a ruling regarding UI’s initial request for a rate increase, and that the matter should be litigated in court.
PURA reviewed UI’s original application – the first such application filed after the state legislature increased the statutory time deadline for a final decision from 200 to 350 days – for a year. The process included hearings, briefs and comments and correspondence from UI customers, public officials as well UI itself, the state’s Office of Consumer Counsel and PURA’s Office of Education, Outreach and Enforcement.
“The Company offers no credible explanation for why such an extraordinary remedy is appropriate,” Tong’s response states of UI’s most recent request. “To the contrary, all of the representations the Company made in its Motion are either demonstrably false or so vague and ambiguous as to be unverifiable.”
Tong takes issue with UI’s contention that PURA’s August rejection of its rate application is leading to the company experiencing serious financial harm, adding that its return on equity was 4.61 percent as of Sept. 30, 2023. UI’s new rates only went into effect Sept. 1, 2023, Tong argues.
“The new rates from the Final Decision, therefore, would have virtually no impact whatsoever on the Company’s reported earnings for the previous 12 months. Indeed, because the new rates were $23 million higher than the preceding fifty weeks on an annualized basis, any impact of the new rates on UI’s earnings would be positive,” according to the response. “In short, whatever created UI’s 4.61 percent earnings for that 12 month period was something other than UI’s new rates and there is no reason to expect those conditions will continue through the next twelve months.”
Tong also rejects UI’s contention that the rate decision has taken a toll on employee morale, as UI has provided no specific evidence, only general statements.
PURA should reject this latest request, the response states, as other utility companies can use similar motions and unnecessarily burden PURA and its ability to manage its dockets.
“Enough is enough. The Authority should not reward the Company for making
repeated collateral attacks on Authority decisions simply because it does not like the outcome,” the response says.
Tong’s response was filed a week after his office released a fiery statement describing UI’s filing as “another cynical, overly aggressive money grab.”
UI responded, accusing Tong of engaging in a smear campaign, and that decisions will be made by the courts and PURA – not the Attorney General’s office.
“We welcome the Attorney General’s participation in our application, but respectfully request he refrain from casting dispersions and unsupported allegations,” the UI statement reads.”This is not the behavior of Connecticut’s legal counsel who holds a position of trust and responsibility that requires adherence to the highest ethical standards.”
UI said their filing last week was a response to PURA’s “unusual and illegal order that slashed the company’s revenue, thereby jeopardizing the top-tier grid reliability and resiliency our customers expect and deserve.”
