Eversource, UI, Facing Penalties For Responses To Storm Isaias

CONNECTICUT — The state's two major electric utilities are facing harsh sanctions for their respective responses to Tropical Storm Isaias last summer.

The Connecticut Public Utilities Regulatory Authority Wednesday issued a ruling that found both Eversource Energy and United Illuminating did not "meet certain acceptable performance standards" in preparing for, and responding to, Tropical Storm Isaias.

The final decision in Docket No. 20-08-03 concludes an eight-month investigation following Gov. Ned Lamont’s request for PURA to initiate a "comprehensive investigation" into how Connecticut's electric distribution utilities prepared for and responded to the Aug 4, storm.

The storm that left more than 1 million Connecticut residents and businesses without power for an extended period in the midst of the coronavirus pandemic and and a summer heat wave.

The investigation considered more than 500 written comments from the public, including 48 sets of comments from public officials, all of which expressed "universal frustration" with the power companies' response to Isaias.

The "overwhelming majority" of the comments cited monetary losses incurred from refrigerated items spoiling and other costs associated with buying fuel to back-up generators.

Commenters also decried an "inability" to contact Eversource, and to a lesser extent, UI, to report outages, downed wires and other safety issues in the wake of the storm.

Eversource spokesman Mitch Gross offered a response.

"We stand by our response in Storm Isaias as we know our thousands of employees showed skill and dedication in restoring power to customers as quickly as possible," he said. "There are many areas for improvement that we are already addressing and we continue to work in good faith with our communities, customers and regulators to improve our performance. Today’s decision deserves careful consideration and review and we are committed to moving forward in the best interest of our customers."

Some of the most scathing criticism came from the town of Vernon. At the time of the storm cleanup, Vernon Town Administrator Michel Purcaro said he and Lt. William Meier of the Vernon Police Department had to hunt down line workers and hand-deliver maps because they were "driving around aimlessly with no specific work orders."

"I can only speak to Eversource's response, but the town supports PURA's finding regarding the epic failure to respond to the community's needs. The town renews its demands for reimbursement to the town and the ratepayers."

Purcaro, one of the responses to the inquiry, has blamed Eversource for 60 percent of the $160,000 in municipal cleanup costs associated with the storm.

Added Connecticut Attorney General William Tong, "Eversource failed and must regain our trust. Their failed response to Isaias put lives in danger, and left families in the dark and disconnected during a deadly pandemic. PURA’s strong decision correctly concludes that Eversource was ill-prepared and poorly managed throughout the storm crisis. PURA has rightly opened the door to strong penalties and corrective action, and we will continue to advocate for full accountability at every step of this process."

PURA's decision concluded that Eversource exhibited "multiple deficiencies," that failed to satisfy "established performance standards for managing its municipal liaison program, executing its Make Safe responsibilities, communicating critical information to its customers, and failing to meet its obligation to secure adequate resources in a timely manner to protect the public safety and to provide for the overall public interest."

The report continued, "The myriad failures were particularly poignant in the first 48 hours following the tropical storm when (the utilities') inactions or deficiencies created a significant risk to public safety."

The investigation concluded that UI’s performance was "underwhelming in certain areas, but was still markedly better than that of Eversource."

The report stated, "While UI secured and deployed adequate line crews for the event, in communities such as Bridgeport, the company failed to meet all of its Make Safe obligations. The investigation also found that UI failed to meet its public safety obligations in responding to the highest priority calls."

According to the report, "Ultimately, neither electric utility fully met PURA’s or their respective customers’ reasonable expectations for managing a major storm event."

Consequently, legally binding orders mandated by PURA's decision require numerous enhancements to the power companies' emergency response plans to "ensure that both the companies and Connecticut ratepayers are better positioned to combat future climate events."

PURA also announced that it will immediately move into the second phase of the proceeding — Docket No. 20-08-03RE01 — during which it will consider and enforce any civil penalties and further remedial or enforcement orders.

Due to response and management deficiencies identified during this investigation, PURA will require comprehensivemanagement audits to be performed on Eversource and UI by an independent, third-party firm, to be scoped and commenced this summer.

Further, PURA will also require Eversource and UI to modify their rates in a pending or future rate proceeding to reflect a downward adjustment of 0.90% and 0.15%, respectively, in their allowed rate of return on equity (ROE). This is meant to align the EDCs’ management performance in future storm response efforts with their financial performance.

Chairman Marissa P. Gillett said, “Today’s decision represents the culmination of our months-long, comprehensive investigation, assisted tremendously by the first-hand experiences of customers and municipal leaders. Make no mistake – the decision is a commentary on the deliberate decision by Eversource leaders to manage the company as a corporation, rather than as a utility with a statutory public service obligation."

Gillett said the decision is not a reflection on the "commendable efforts of the line workers, field crews, damage assessors and others, who came from near and far to assist Connecticut in our time of need.Now, we must all turn with renewed focus to next steps. I am not satisfied by the status quo of the utilities treating PURA simplyas a body that they report information to – we are their regulator, and continuing to hold them to account will remain my mission for the duration of my service in this position.”

Gov. Ned Lamont said the decision was justified.

"PURA announced today what we have known since Tropical Storm Isaias hit our state last summer – Eversource and UI were not adequately prepared to serve their ratepayers to keep the lights and air conditioning on during a significant storm," Lamont said. "Accountability is critical for all ratepayers across our state and that is what is happening now. Additionally, I am proud of the bipartisan bill that I signed into law following the storm to provide additional support to ratepayers and advance our commitment to a more resilient, reliable, and performance-based electricity system."