New Haven Register (New Haven, CT)
Electric rate hike could be spread out
Eversource seeks change, impact could be stretched over 2 years
Connecticut’s lead consumer advocate is endorsing an Eversource request for state regulators to reinstate bill hikes that were put on hold in August, while spreading out monthly increases over as much as two years to cushion any “rate shock” hitting households.
Eversource filed arguments on Friday with the Connecticut Public Utilities Regulatory Authority for the agency to lift a suspension of higher rates that took effect in July, including via a new powerpurchase agreementwith the Millstone Power Station nuclear plant in Waterford. Coupled with a heat wave that had more families pumping air conditioners while staying home during the pandemic, some Eversource customers complained of bills triple or more their usual levels.
PURA had asked for the company’s stance in mid-September after exploratory hearings. Eversource’s response was undersigned by Vincent Pace and Joaquina Borges King, who hold the roles of senior counsel under Greg Butler, general counsel.
Pace and King described Eversource executives as “deeply sensitized” to customers who have struggled during the COVID-19 pandemic, but argued any further delay in collecting the full rates it is due would only kick the can down the road. The company recommitted to working out payment plans for the duration of the pandemic with any customers having difficulties paying their bills.
“There is no doubt that a rate increase would be extraordinarily difficult for many customers at this time,” Pace and King wrote. “However, a wholesale deferral of costs for the purpose of reducing rates is not the better option for customers. Customers are — and will continue to — consume electricity. The costs ... cannot be avoided indefinitely and the continued use of electricity is only building up new costs.”
Under Connecticut statute, PURA has a “rate adjustment
mechanism” that aligns collections based on prior forecasts with actual costs and revenues in delivering electricity.
The General Assembly approved last week an overhaul of the state’s regulation of utilities, to include changing to a “performance-based” system that would allow PURA to penalize utilities for lapses in expected service levels, both retroactively and in future rates. Lawmakers pressed for the change after lengthy power outages in early August due to Tropical Storm Isaias, with Gov. Ned Lamont expressing support but having yet to sign the bill into law as of Tuesday afternoon.
Pace and King added that cooler and drier weather is providing de facto monetary relief as air conditioners and dehumidifiers go quiet, cutting electricity use. And Eversource proposed a few measures to ratchet back amounts customers would have to pay immediately, with Connecticut’s office of the consumer counsel backing what it described as “creative ratemaking techniques.”
Eversource has suggested several measures it could implement,
including extending collection of a portion of rates attributable to Millstone over 24 months, rather than six under the current rates that took effect in July. Eversource indicated it could accelerate as well refunds to customers of excess tax deferrals it has on the books, as a result of the federal
Tax Cuts & Jobs Act of 2017 which cut corporate income taxes to 21 percent from 35 percent previously.
“We are not normally fans of putting a lot of these costs on the ratepayer credit card, but given COVID and the huge outcry, we supported it given that this is [an] abnormal and hopefully once-ina-generation type event,” said Rich Sobolewski, acting consumer counsel for the state of Connecticut. “Booting rate cases down the road — we don’t like doing that ... but this is unprecedented.”
Sobolewski speculated it was possible PURA could impose additional measures beyond what the company had proposed that could help out customers, with a PURA spokesperson confirming that is an option.
“There are no further procedur
al steps planned at this time until PURA issues a decision,” stated PURA spokesperson Taren O’Connor in an email response to a query. “Generally speaking (PURA) is not limited to the utilities’ proposals or recommendations and may order the implementation of other programs.”
Eversource offered to add online tools as well that would allow customers to compare a current bill against a previous bill of their choosing, to give them a better sense of changes in rates and electricity use. And a “delivery” component of bills could be itemized to separate specific charges that are lumped together currently, with state Attorney General William Tong pressing for such a change.
“There are no easy fixes to reduce the charges that caused customer bills to increase in July 2020, which are generally pass-through charges,” Tong wrote Friday in formal comments to PURA. “Ratepayers generally did not understand the reasons why their electric bills went up in July 2020.”