State Regulators OK Eversource Storm Cost Recovery, Reject 'Carrying Charges' In Final Decision

CONNECTICUT — The Connecticut Public Utilities Regulatory Authority has approved Eversource Energy's request to recover hundreds of millions of dollars in storm restoration costs incurred between 2018 and 2023, but rejected the utility's bid to pass along hundreds of millions more in "carrying charges," or interest rates to customers.

In a final decision issued Wednesday in Docket No. 25-12-13, PURA found that approximately $861 million in storm-related costs were prudently incurred and are eligible for recovery through securitization, subject to the authority's review and approval of financing documents.

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However, regulators denied Eversource's request to recover the aforementioned carrying charges — essentially interest costs the company said accumulated while the storm expenses awaited regulatory review.

The authority concluded that allowing customers to pay those financing costs before a prudence determination would conflict with longstanding Connecticut ratemaking principles and prior PURA precedent.

PURA said utilities are responsible for financing deferred storm costs until regulators determine the expenses were prudently incurred. Only after that determination may carrying charges begin to accrue under existing policy, the authority said.

The decision authorizes Eversource to move forward with securitizing the approved storm costs through bonds, a financing mechanism created by the Connecticut General Assembly that is intended to spread recovery over time and reduce costs to customers compared with traditional financing. The exact impact on electric bills will be determined in subsequent proceedings approving the bond issuance and repayment schedules.

The ruling covers storm restoration expenses from major weather events occurring between 2018 and 2023, including costs associated with restoring electric service, mutual assistance crews and related emergency response activities.

The authority's decision largely aligns with arguments made by the Office of Consumer Counsel and Connecticut Attorney General William Tong, who urged PURA to reject more than $300 million in requested carrying charges, arguing customers should not bear financing costs that accrued before the authority completed its prudence review.

Eversource released the following statement:

"We appreciate the thoughtful and deliberate process PURA implemented to reach this decision. Customers demand a fast and effective storm response when our state is impacted by extreme weather and have a low tolerance for outages. Meeting those customer expectations requires appropriate storm preparation and response, which comes at a substantial cost. PURA's final decision is an important step toward recovering the significant and prudently incurred costs associated with responding to and restoring power following several destructive storms from 2018 - 2023.

"Storm response is a process of continual improvement, and we look forward to applying what we've learned from this outcome to improve our process going forward. With affordability a main focal point here in Connecticut and across the nation, the authorization to securitize these catastrophic storm costs will allow us to remove those hundreds of millions of dollars from our recently filed rate review, resulting in a lower bill impact for customers. We will now focus on moving forward with securitization of these storm costs, which is a complex and lengthy process but one that will lead to significant savings for customers."