CT Officials Announce UI Rate Relief, Then Challenge Eversource

HARTFORD, CT — Gov. Ned Lamont and state Attorney General William Tong Wednesday announced that the State of Connecticut has reached an agreement with United Illuminating to offer a $46.5 million COVID relief bill credit to "decrease and stabilize" electric rates into 2023.

Additionally, UI has committed to not change base distribution rates until at least May 2023 to provide "further certainty" for its customers, they said.

The agreement is subject to review and approval by the Public Utilities Regulatory Authority.

On the heels of the announcement, the state's top legal administrator challenged the state's other major electric utility — Eversource Energy — to follow suit. Eversourse earlier this month submitted a plan for for a rate increase.

Lamont said the agreement with UI was reached on behalf of the state by the Department of Energy and Environmental Protection, the Office of the Attorney General, the Office of Consumer Counsel, and the Office of Education, Outreach, and Enforcement at PURA.

UI contributed $5 million to support customers, in addition to an accelerated return of $41.55 million of accumulated savings from federal tax cuts to fully offset what would have been a 5 to 8 percent increase in bills on May 1, due to federally-mandated transmission charges and the costs of the Millstone power purchase agreement, Lamont said.

PURA delayed implementation of that increase because of the "public health and economic crisis" caused by COVID-19, Lamont said.

"For families and businesses who have been struggling with high energy costs during the pandemic, this agreement promises more affordable, predictable rates," Lamont said. "When I signed legislation to reform utility accountability, I called on the utilities to put ratepayers above profits. Today’s settlement, achieved through ratepayer focused negotiations by our state agencies, represents a positive step by UI in that direction."

Tong touted economics.

"This unprecedented COVID relief credit will result in immediate savings and long-term rate stability for Connecticut families," Tong said. "We pay far too much for our energy here in Connecticut, and families need and deserve stability as we emerge from this economic and public health crisis. United Illuminating came to the table prepared to make real concessions, including contributing millions of dollars of their own dollars to ease the burden on local ratepayers."

UI Chief Executive Officer Frank Reynolds agreed.

"This settlement allows us to provide meaningful benefits to our customers, many of whom continue to be impacted by the economic effects of the COVID-19 pandemic," Reynolds said. "If approved, it will not only avert a bill increase in the near term but will also help keep rates stable in the foreseeable future. I want to thank Governor Lamont, the Connecticut Office of the Consumer Counsel, the Attorney General, the Department of Energy and Environmental Protection and PURA’s Office of Education, Outreach and Enforcement for working with us to provide rate relief for customers."

The proposed agreement settles a portion of a proceeding at PURA related to a provision of Public Act 20-5, which was passed in the special session of the General Assembly convened by Governor Lamont in the fall of 2020. That statute provided that PURA could investigate an interim rate decrease for Connecticut’s electric distribution companies.

"This agreement comes "not a moment too soon," Connecticut Energy and Environmental Protection Commissioner Katie Dykes said.

Richard Sobolewski, Connecticut’s Acting Consumer Counsel, said, "If approved by PURA, this plan allows for the costs that were deferred last summer to be recovered without a bill increase."

The settlement has been submitted to PURA for approval.

If approved, the COVID Relief Bill Credit will appear as a line item on bills from May 1, 2021 through December 22, 2022, and will be calculated based on usage. UI last changed its distribution base rate in January 2019, so this agreement would result in its customers seeing no changes in the base distribution rate for more than four years, Lamont said.

On March 9, 2021, PURA ordered UI to provide an updated filing for the distribution of $3.6 million in "overearnings" due to residential ratepayers.

Meanwhile, about half-a-year since state regulators called an electricity rate hike too much to handle for customers, especially during a global health pandemic, Eversource Energy has filed another rate increase request.

Eversource officials filed the latest rate proposal March 1 with PURA, which took the increase away over the summer when public outcry demanded it after some bills went up by more than a hundred dollars.

Two considerations were included in the filing:

• A single rate increase, which would take effect May 1, designed to up the average customer bill by $12.55 per month or 8.2 percent. That amounts to a $166 average monthly bill with the average Eversource residential usage of 700 kilowatt hours per month.
• A two-phase increase that would spread the "recovery" money from last year's rate hike postponement over a three-year period. A May 1 increase would raise bills by 0.7 percent, or $1.06, to an average of $154 a month. The second increase would take effect Oct. 1 and increase the average bill by $5, or 3.24 percent, to $159 per month.

Over the next six weeks, PURA will assess the request and is scheduled to issue a ruling "on or around" April 28.

See more on the Eversource filing here.

Tong issued a challenge to Eversource to follow Wednesday's agreement

"It makes such a difference to have corporate leadership firmly committed to Connecticut. Eversource, the ball is in your court now," he said.