Regulators reject UI rate settlement
Connecticut utility regulators have tentatively rejected an agreement reached in March by Attorney General William Tong and the administration of Gov. Ned Lamont that would have decreased and stabilized electric rates for customers of The United Illuminating Co. into 2023.
Tong responded angrily Friday to a draft ruling from the Public Utilities Regulatory Authority rejecting the $46.5 million COVID relief bill credit to decrease and stabilize electric rates into 2023. PURA’s
decision, which was issued late Wednesday, adds $2.4 million in new costs to ratepayers, the Attorney General said, while rejecting a $5 million voluntary contribution from UI.
PURA’s ruling also enables UI to immediately apply for an increase in rates, according to Tong. Under the terms of the negotiated settlement with the state, UI had agreed not seek an increase in distribution rates until sometime after May 2023.
“PURA got this wrong and I strongly urge them to reconsider,” Tong said. “I do not understand why they rejected a settlement that does so much to help Connecticut families squeezed by the cost of electricity. Their plan will provide a marginal immediate savings to ratepayers, but at the expense of millions of dollars in new charges to Connecticut families who simply cannot afford to pay more down the road.”
The agreement between state and UI would have offset a proposed increase of up to 8 percent in bills on May 1, 2021. The increase is the result of federally-mandated transmission charges as well as costs associated with a power purchase agreement involving the owners of the Millstone nuclear plant.
The settlement included a $5 million voluntary contribution from UI , and an accelerated the return of $41.55 million from federal tax cuts long before the company would have otherwise been required to do. The draft ruling keeps in place the return of the tax savings that in place, according to Tong.
In rejecting the $5 million in UI shareholder funds, PURA chose to spread the cost over a period of 68 months adding a 3.25 percent prime interest rate which will vary per year, according to Tong.
Doing it that way, he said, will provide limited immediate relief to ratepayers while adding significantly to their costs in future years.
“This just doesn’t make good sense to me, especially when United Illuminating was willing to contribute their own money to avoid this problem,” Tong said. “Connecticut consumers pay far too much just to keep their lights on, and we all needed the rate stability that this deal would have provided. This is just a draft decision, and I am hopeful that with further analysis and deeper understanding, PURA will change course.”
PURA officials were not immediately
available for comment regarding Tong’s comments about the draft decision. The regulatory agency typically does not respond to requests for comment on its draft rulings.
Ed Crowder, a spokesman for UI, said company officials “were surprised and disappointed that PURA rejected our carefully considered and unprecedented settlement offer.” The settlement agreement, according to Crowder, had the support of the Office of the Consumer Counsel, the Department of Energy and Environmental Protection, and PURA’s own Office of Education, Outreach & Enforcement, in addition to the backing of Lamont and Tong.
“As this decision is finalized in the weeks ahead, we expect to file comments on the draft decision, highlighting elements we believe would negatively impact UI customers,” Crowder said. “We will continue to work with PURA staff and the other parties to advocate for a fair and balanced outcome that supports our customers during these challenging times, as we continue to provide safe, reliable service and support the state’s clean energy goals.”
UI has 338,654 residential, commercial and industrial customers in 17 communities in the New Haven and Bridgeport areas.