The Connecticut General Assembly will consider a wide-ranging bill in special session this month aimed at addressing apparent shortcomings in the response by Eversource and United Illuminating to Tropical Storm Isaias.
That bill will include provisions that task the Public Utility Regulatory Authority with reviewing and establishing minimum staffing levels for the energy providers.
In written testimony in response, Eversource and United Illuminating warned that more staff will mean significantly higher rates for customers.
The bipartisan bill, “An Act Concerning Emergency Response by Electric Distribution Companies and Revising the Regulation of Other Public Utilities,” was introduced by State Sen. Paul Formica, R-East Lyme, State Sen. Norm Needleman, D-Essex, State Rep. David Arconti, D-Danbury, and State Rep. Charlie Ferraro, R-West Haven.
At the start of the Tuesday listening session, Needleman, who is chairs the committee, and Formica, both expressed support for strengthening accountability for the energy providers.
“This is an important topic and this is something that we all have to take seriously, and the utilities need to understand that this very serious conversation has to happen,” said Formica.
The cost of adding staff
In written testimony to the legislature’s Energy and Technology Committee ahead of its Tuesday hearing on the bill, the energy providers used nearly identical language to warn that additional staffing will significantly increase rates at a time when elected officials, the public and providers are all looking to reduce costs for customers.
While Eversource outright opposed the provision, United Illuminating offered support for PURA to study minimum staffing levels, if the review is part of PURA’s existing Emergency Response Plan review, and balances any benefit of additional staffing with the impact on ratepayers.
In an email, O’Connor said statutes give PURA broad authority over staffing at the distribution companies.
“We would, based on that authority, be able to direct them to adjust specific staffing levels, but that would have to be done in a contested proceeding,” O’Connor said in an email.
Eversource and United Illuminating both cited a study released by PURA in January as evidence that staffing would be costly for consumers.
That study, prompted by an act passed by the legislature in 2019, reviewed staffing for the five storm levels outlined in each company’s Emergency Response Plan. A level 5 storm is the least damaging, and a level 1 storm the most damaging, leaving 70-100 percent of customers without power.
Taren O’Connor, PURA director of legislation, regulations and communications, said she didn’t think anything has changed about the rate impact of increasing staffing since the report was released, but said it’s important to note the analysis was based on hypothetical scenarios and there has been no analysis of actual rate impacts from this proposal.
The study determined that both companies employ a sufficient number of internal staff and local contractors to respond to common level 5 storms — which can leave up to 10 percent of customers without power for less than 3 days.
For stronger storms, the companies rely heavily on external resources, including local contractors, out-of-state affiliates and mutual aid crews, according to PURA.
The amount of resources needed increases quickly between levels of severity. A level 4 storm requires double the amount of line resources as a level 5, and a level 3 storm requires triple the resources of a level 5 storm, according to PURA.
For Eversource to maintain staff for a level 3 event in the winter, which requires more resources, the energy provider reported that it would need an additional 1,294 staff positions, at an additional cost of $339.5 million a year. A level 1 event in the winter, the most resource-intensive restoration, would require an additional 2,439 staff at a cost of $639.7 million a year, according estimates provided by the energy provider.
For United Illuminating to maintain staff for a level 3 winter event, the company would need to hire an additional 300 full-time positions at a cost of $43.6 million a year. For a level 1 winter event, UI would need 1,870 more staff at a cost of $276.7 million a year, the energy provider estimated.
Eversource said that those estimates were conservative and did not include additional costs like recruiting and hiring from outside the region, inflation and annual wage increases. According to the company, any plan to bring in that level of craft workers would require hiring apprentices needing 4-5 years before full qualification because of a shortage in line workers in the labor market. The company would need to continue contracting help in the meantime.
According to PURA, United Illuminating faced two storms before the review that resulted in more than 10 percent of customers losing service for more than 48-hours – the criteria set by the legislature for PURA to review. For Hurricane Irene, United Illuminating used 386 additional line workers at a cost of $7 million, and it used 665 additional line workers at a cost of $16.5 million for Hurricane Sandy.
Eversource faced three such storms. It used 1,071 additional staff at a cost of $64 million for Hurricane Irene; 1,347 additional staff at a cost of $84 million for Hurricane Sandy; and 1,596 additional staff at a cost of $113 million for the October 2011 snowstorm.
“When considering the EDC’s reliance on contractors and mutual aid, and the possibility of increasing the Company’s internal staffing to alleviate this reliance, it is worth comparing the total costs they have incurred for outside line resources with the estimates presented in the hypothetical scenarios in previous sections,” the PURA report stated.
Eversource also pushed back on a provision in the bill that would require the distribution companies to open, operate and staff regional service centers, explaining that the measure would need more discussion and should be considered during the regular legislative session.
“Importantly, the closure of former [regional service centers] did not negatively impact storm response because Eversource had arrangements in place for utilizing properties across the state as staging areas, when needed, in order to respond to storm events,” the company claimed in testimony on Tuesday. “Eversource used these locations to house operations personnel, material lay down areas, perform truck refueling, parking, feeding and lodging.”
According to Eversource, the closure of those centers had been approved by PURA. Some of those locations have been sold, and their cost has been removed from rates. The provider testified that re-opening these centers would create more costs for customers.
“The next rate case, if they’re saying to us, ‘Well, we actually need more staff in order to staff all those resources, or all of those centers,’ then they would have to make the demonstration to us that rather than reallocating staff, they needed to hire new staff,” PURA Chair Marissa Gillett told the Energy Committee on Tuesday. “And if they can successfully demonstrate that new staff were necessary in order to comply, then that could be a factor in their rate increase next time.”
This story was updated to include comments by Taren O’Connor, PURA director of legislation, regulations and communications