The Register Citizen (Torrington, CT)
Eversource to face scrutiny as it seeks higher electricity rates
With the mercury rising after the unofficial Memorial Day kickoff to summer, Eversource will be back in front of state regulators this week to argue for higher rates to cover the cost of transmitting electricity to customers and meeting state requirements.
Eversource and Avangrid are able to request adjustments to approved rates for both the cost of the electricity purchased from power plants, as well as the costs they incur to transmit electricity to customers. The Public Utilities Regulatory Authority has scheduled a Thursday hearing to consider any additional adjustments to transmission costs, allowing up to three days to collect testimony.
With gas and heating oil prices at record levels since Russia’s invasion of Ukraine, a handful of customers wrote PURA in March to protest any increase in electricity bills this year. The Connecticut Office of Consumer Counsel had estimated previously that the changes would raise customer bills about $3 or $4 a month on average.
In the summer of 2020, Eversource and Avangrid customers vented after getting hit with a double-whammy of skyrocketing bills that coincided with Tropical Storm Isaias knocking out power across swaths of Connecticut. With a new purchase agreement in place for power from the Millstone nuclear plant in Waterford, utility bills soared as people cranked up air conditioners during a heat wave while stuck at home during the COVID-19 pandemic.
The Connecticut General Assembly created a “take back the grid” law that forces the two utilities to reimburse customers for spoiled food and medicine, if PURA determines any prolonged outage could have been prevented through better planning. Legislators also signed off on PURA’s proposal to review rates based on a look-back at actual costs to deliver electricity
instead of relying on forecasts, with the goal of not having to tinker with future charges to make up for educated guesses that missed the mark.
In the first three months of this year, Eversource took a charge against earnings to account for just over $24 million in customer credits it agreed to provide after Isaias. The company was still able to log a 21 percent increase in profits to $444 million, based on rate hikes in Massachusetts and New Hampshire and lower pension costs in Connecticut among other factors, according to its quarterly report with the U.S. Securities & Exchange Commission.
As an additional Isaias concession in Connecticut, Eversource agreed to not seek a new rate case prior to January 2024 in its historic Connecticut Light & Power territories, with the possibility it would wait an additional year.
“It’s too early to determine when we would file,” said John Moreira, chief financial officer of Eversource, speaking on a conference call in early May. “We will continue to monitor what the earned returns are for CL&P and make a decision accordingly.”
In April, PURA issued an interim approval of Eversource’s proposed rates for six months starting this September. PURA approved small increases to help Eversource cover the cost of maintaining its transmission infrastructure, with a previous increase having been tabled during the pandemic as a form of customer relief.
Billed rates are also edging up to support renewable energy programs mandated by state law and reimbursements for “stranded” costs Eversource incurred decades ago in selling off power plants during deregulation.
Since then, Eversource has been answering piecemeal questions on technical elements of its rate-adjustment assumptions and seeking PURA approval to keep some information confidential for varying business reasons.
On the May conference call, CEO Joe Nolan expressed the belief that the company has come a long way in repairing its relationship with policymakers in Connecticut.
“We got a very good relationship with the governor, with the attorney general down there — and I think things are very, very much improved, obviously, from some of our challenging times,” said CEO Joe Nolan, speaking in early May. “I feel good about the climate down there.”