Officials angry over Eversource plan to recoup loss via rate hikes
Local and federal officials are blasting Eversource after the utility’s leader said they’d try to recoup money spent on Tropical Storm Isaias through rate increases..
Eversource estimates the storm costs incurred in Connecticut are just over $230 million, nearly 80 percent of which is attributed to mutual aid crews, independent contractors, vegetation management cress and environmental cleanup.
“We expect as we have in the past that cost recovery would be allowed for these costs if they were prudent,” CEO Jim Judge said in a call to industry analysts reporting Eversource’s financial results from last year.
That storm cost accounting is the latest Eversource has provided to the Public Utilities Regulatory Au
thority for its investigation into the electric utilities’ storm response, but the cost documentation is still incomplete because of the lengthy invoicing process that they expect to take several more months, Eversource said.
In 2020 Eversource reported $1.205 billion in earnings, a 33 percent increase from the year before.
Because of the open investigation, PURA couldn’t comment on the potential impact to rates and cost recovery is not a specific subject of the docket.
However, the outcomes of the investigation and civil action would impact future cost recovery, according to PURA spokesperson Taren O’Connor.
Newtown First Selectman Dan Rosenthal said PURA has been focused on the issues at hand with the investigation and has faith they’ll see it through properly. Until that investigation concludes, Rosenthal said it’s inappropriate for the utilities to anticipate cost recovery.
“To even make the suggestion before the investigation is complete shows complete disrespect for Connecticut’s regulatory body,” he said.
Isaias was one of the largest power outage events in the state's modern history, comparable in impact to the October snowstorm, Tropical Storm Irene, Hurricane Gloria and Superstorm Sandy.
Thousands of residents remained without power more than a week after Isaias hit and countless roads were blocked by damaged trees and power lines.
“We’re confident that we assembled the largest workforce ever in the state of Connecticut for that storm response and the vast majority of the costs that are being reviewed have to do with bringing in those external resources either from other utilities or from contractors,” Judge said.
But Sen. Richard Blum-nethal, D-Conn., who criticized the utility’s response immediately after the storm, said they shouldn’t even think about charging customers for the cost of the restoration and cleanup.
“They mishandled the response, failed to prepare, were slow and lacking in their reaction, and now they want to charge consumers for it,” Blumenthal said.
Although Eversource has received cost recovery from PURA for previous storms, Blumenthal said this time should be different “because the failures were so stunning.”
“There has to be a lesson here,” he said. “This issue will be a critical test for PURA, whether it will protect consumers. I said after Isaias they (electric utilities) cannot charge consumers for the cost of repair and restoring power, so essentially no more business as usual. They’ve been granted relief in the past and this time has to be different.”
“The massive team we assembled to respond to the devastation caused by Isaias was costly,” Eversource spokesman Mitch Gross said in a statement. “Hosting thousands of outside crews for several days, replacing damaged electrical equipment, paying for fuel and other expenses add up, but it’s money that must be spent to restore power for customers and is subsequently recovered.”
Cheshire Town Manager Sean Kimball recalled the storm’s impact — major roads closed for days, residents without power for almost a week, and a lack of information from the utility.
“There were costs that are difficult to quantify that our residents and businesses faced,” Kimball said. “They had spoiled food, had to find alternative places to stay, to move family members — all during COVID where it was really risky from public health perspective to do that. For this particular storm, people have already paid a significant price in that week for outages and slow response.”
Kimball said if the cost of the storm is simply passed onto ratepayers after the response by the utility, he worries whether that will motivate long term improvement by the company.
“It comes back to accountability and there were failures in the response,” he said. “There should be more burden on the company to bear some of those costs. Cheshire residents already paid the price for Eversource's inadequate planning and slow response.”
Similarly in Ridgefield, First Selectman Rudy Marconi said Eversource can’t justify a rate increase. Many of their roads were only accessible with ATVs and didn’t receive any information on when crews were coming, he said.
“For days nothing happened and they (Eversource) ignored the make-safe protocol because they were more interested in restoration so they could get the greatest numbers up and running. Congrats, Eversouce, you did that and left thousands of people helpless, and worried.”
Marconi said the weather conditions were oppressive — hot, humid — and since most of the town has wells instead of public water, neighborhood after neighborhood were trapped with no water.
“There was a complete breakdown within the management structure in Connecticut,” he said. “It was a tremendous failure and you don’t come back to the people asking to be reimbursed when you failed — I wouldn’t.”
The investigation relates to United Illuminating as well, but the utility did not comment on any plans to ask PURA for cost recovery.
“We await PURA’s decision in this matter, and we’re confident PURA will determine that our response was in accordance with our Emergency Response Plan,” spokesman Ed Crowder said. “Recovery of Isaias-related costs will be established by PURA after the current proceeding has concluded.”