The Middletown Press (Middletown, CT)
UI’s customers could see additional rate hike
Nearly a month after The United Illuminating Co. asked Connecticut utility regulators for an interim rate increase totaling $14 million, the state’s Public Utilities Regulatory Authority has yet to act upon that increase.
UI officials filed the request at the end of November. In that request, company officials said some kind of electricity rate increase was needed in the aftermath of an August ruling in which regulators dramatically reduced a $130.7 million rate increase request over a three-year period that UI officials had filed earlier in the year.
If the interim rate were approved as requested by UI, it would generate a $14 million annual increase for the company. That would translate into an increase of $3.81 per month or 1.8 percent for a typical residential customer, who uses 700 kilowatt hours of electricity per month, Craig Gilvarg, a company spokesman, said Wednesday.
UI officials are seeking to have the proposed interim rate increase take effect Feb. 1, 2024. Information regarding the impact of the hike is based on rates as of that date, Gilvarg said.
But as of Dec. 28, PURA officials had not scheduled any hearings on UI’s interim rate request and no timeline had been developed for any decision on the utility’s request.
If PURA approves the interim rate increase, he said UI will continue to pursue its court challenge of PURA’s August ruling on the company’s original rate increase request.
“The appeal that we filed contested numerous determinations in PURA’s August rate decision, totaling approximately $32 million in annual impact, as well as an additional pre-tax impact of $32.3 million in one-time writeoffs of deferred assets.,” Gilvarg said. “Therefore, the $14 million that we are seeking is only a partial request, conservatively proposed, pending resolution of all issues on appeal. There is no risk to customers of paying rates in excess of what the Connecticut Superior Court rules are just and fair because, per Connecticut law, the increase is subject to refund with interest, guaranteed by a surety bond, if the interim rates ultimately exceed the rates that are fixed at the conclusion of the company’s appeal.”
Connecticut law allows PURA to authorize an interim rate increase as necessary to prevent substantial and material deterioration of the financial condition of a public service company or to prevent substantial deterioration of the adequacy and reliability of service to its customers, according to UI officials. The August ruling had “many legal errors,” according to company officials, who responded by challenging PURA’s ruling in court.
Frank Reynolds, president and chief executive officer of UI said the “interim rate request demonstrates that PURA’s final decision in our rate case has rendered us simply unable to sustain the toptier reliability and resiliency of the electric grid that our customers deserve.”
“At UI, we take pride in the strong reliability our customers enjoy thanks to our investments in the system,” Reynolds said in a statement released after the November interim rate filing. “Now, the Authority’s punitive and arbitrary cuts have forced us to make difficult choices on how to maintain a safe and reliable distribution system and protect our frontline union workers, while also compromising our ability to attract the capital investment ultimately needed to provide essential service to our customers at stable, predictable rates.
Our efforts to rebuild aging infrastructure, including substations in Bridgeport and Hamden, and to replace our vehicle fleet, which ensures our workers can quickly and safely respond to outages and emergencies, must be deferred until we are allowed to collect adequate revenue to sustain those efforts,” he added.
The request and the statement made by Reynolds last month triggered a testy exchange with Connecticut Attorney General William Tong and company officials in the days following the filing.
Tong responded to the Nov. 30 interim rate request saying he had “no words for this latest bad faith maneuver by UI.”
“It’s hard to see this as anything but another cynical, overly aggressive money grab when so many Connecticut families are struggling and working hard to make ends meet,” Tong said on Dec. 1 in response to UI’s interim rate increase request. “This rate hike request is highly unusual, if not unprecedented, and we will intervene on behalf of rate payers to oppose it.”
UI officials responded to Tong’s pointed remarks with an statement from the company, calling his statement a continuation of an “irresponsible smear campaign by accusing us of a ‘bad faith maneuver’ in filing an interim rate request.”
Contrary to Tong’s claim that a utility seeking an interim rate increase was unprecedented, such requests of regulators are rare, but not unheard of, according to Joe Cooper a PURA spokesman.
“A company (Jewett City Water Co.) last requested an interim rate increase in 1999,” Cooper said.
Before that, three other interim rate increases were raised as dockets between July 1984 and Aug. 1986, according to Cooper. Those requests, as well as the one made by the Jewett City Water Co., were all denied, he said.
Gilvarg said the decision by company officials to seek an interim rate increase is being pursued because they believe that PURA’s August ruling “is severe and debilitating for UI.”