Reimbursement, low-income rates highlight utility bill
Starting Wednesday, the General Assembly will weigh extending special rates to utility customers with low household income and reimbursement to customers who suffer extended outages under a larger bill that would stiffen oversight of Eversource and Avangrid.
If passed as drawn up, the bill would order the Connecticut Public Utilities Regulatory Authority to switch to a “performance-based” model for utility oversight that is the model in Massachusetts and several other states, and covers natural gas and water utilities. And the legislature would task PURA with a possible move toward an immediate “interim rate decrease.”
Legislators pressed for the changes in the wake of extended power outages caused by Tropical Storm Isaias in August, and after customers became irate over electric bills that for some were double or triple their previous amounts. The bill would authorize PURA to penalize Eversource and Avangrid subsidiary United Illuminating up to 4 percent of their annual revenue if it determines they did not adequately plan for and respond to mass outages.
Customers that endure outages of more than four days would receive a $25 credit on their bills for each additional day they were left in the dark, and would be able to apply as well for up to $250 in additional compensation to replace spoiled food or medicine. Utilities would be able to seek a waiver if they can prove restoration efforts were slowed by a storm’s severity or the safety risks to employees.
The General Assembly’s Energy and Technology Committee wants PURA to get started crafting new regulations by next June, with the legislation to be introduced by state Sen. Norm Needleman, D-Essex, and Rep. David Arconti, D-Danbury.
Eversource and Avangrid have not opposed the concept of a switch to performance-based regulation, though United Illuminating’s CEO asked three weeks ago for a fair set of standards. Eversource CEO Jim Judge warned legislators separately the company could be forced to seek rate increases if confronted with the prospect of massive penalties in the wake of storms packing the punch of Isaias.
“Rates must have clear and measurable metrics that the (company) is expected to meet,” stated Tony Marone, president of the Avangrid Networks division that includes United Illuminating, during September testimony to legislators. “These metrics must take into account the severity of the storm for which performance is being measured and the company must be able to have the resources needed to meet those metrics.”
PURA would be able to factor in utility failures in delivering on expected service levels into future rates, under 10 broad categories including affordability, emergency response and overall reliability. The utilities would have to adhere to minimum staffing levels in advance of major storms. PURA would be required to review operating and financial performance every four years or more frequently at its discretion, to include profits and dividends paid investors.
PURA currently approves rates according to a determination on whether the operational and investment requests of utilities are reasonable, while guaranteeing them a set level of profitability.
“We continue to talk with legislators about the proposals and how they will affect our customers, reliability and affordability,” stated Eversource spokesperson Mitch Gross.
Legislators stripped out multiple elements from an earlier draft. While the new bill would allow PURA to reduce the amount of compensation for utility executives
that is supported by customer payments, the earlier version would have sought to claw back any compensation above that of the average or median pay of utility CEOs in a swath from Maryland to Maine. Judge told legislators in late August that he expects to take a cut in pay next year, partly the result of the outcry in Connecticut over Isaias restoration.
The legislature will give PURA nearly a year to analyze utility rate requests. PURA Chair Marissa Gillett had requested the change from the current window set at five months, arguing it is too little time to sift through the intricate details of utility rates.