State Regulators Announce Limits to Eversource Cost Recovery


TwitterFacebookCopy LinkPrintEmail

Eversource will be prevented from recovering a large portion of the costs of Tropical Storm Isaias, state utility regulators announced Friday evening in a draft decision based on an investigation into widespread and lengthy power outages stemming from the August storm. 

The state’s Public Utilities Regulatory Authority will still take public comment on the decision before the board can vote on whether to approve the decision, but its investigation concluded that Eversource was not “reasonable or prudent” in managing its municipal liaisons, executing the Make Safe programs, communicating critical information to customers or in securing adequate resources in the first 48 hours of the storm response.

The authority said that it will decide in a later proceeding exactly what costs the state’s largest energy provider will be prevented from collecting, but the decision singled out costs for outside crews, lodging for workers, cleanup costs for towns, and “any loss in customer value due to delayed restoration during the first 48 hours of the company’s response to Tropical Storm Isaias.”

United Illuminating could also be barred from recovering some costs from its storm recovery efforts, but the authority found that the company “generally met the standards of acceptable performance and prudency.”

The decision, if approved on April 28, also orders the utilities to update their emergency response plans, and to study how many crews the utilities would need to clear downed wires from roads in every town immediately after a storm.

In addition, the utilities were ordered to work with Connecticut towns to improve communication during emergencies and to write out a formal process for contacting customers with medical conditions requiring life-saving devices before, during and after a storm.

The investigation

Connecticut’s response to Tropical Storm Isaias in early August 2020 sparked an intense public backlash aimed especially at Eversource, which was clearly heightened by rate increases a month earlier and high summer electric bills during the financial stress of the pandemic.

After PURA announced an investigation, customers and town leaders contacted the regulator to express anger and frustration, and to ask for help. State officials from the Attorney General’s Office, Office of Consumer Counsel and Department of Energy and Environmental protection held a series of exchanges with the companies – especially Eversource – in filed briefs that CT Examiner reviewed for this report.

One woman, who said she was a single mother of two struggling to get by on an hourly wage, asked PURA whether she should not pay for her health insurance, car insurance or asthma medication so that she could pay for her $300 electric bill.

“When you live paycheck to paycheck this money isn’t there,” she wrote.

Customers told state regulators that they were unable to report outages in the immediate aftermath of the storm and that they received unclear and often incorrect information about when  power would be restored. According to town leaders, Eversource failed to communicate with them and stymied essential road clearing efforts, leaving residents trapped by blocked roads and inaccessible to emergency services for days, and in some cases for as long as a week.

State officials sided with the outraged public and made the case against Eversource in the PURA investigation, setting the stage for the utility regulator’s decision on cost recovery.

In filings, Eversource insisted that it had done the best it could with the information it had, and cannot be penalized. The company said that claims it had failed to communicate with towns and customers were not true, and that claims the company had failed to provide the towns with sufficient help clearing roads, were based on a lack of understanding of the process by local officials.

Eversource has maintained since the storm that it should be allowed to recover the cost of responding to Isaias – $233.2 million in the latest estimate – by passing those costs on to customers.

The office of Attorney General William Tong disagreed, and pointed to PURA’s history of penalizing Eversource and its predecessor Connecticut Light & Power when it determined the company was deficient in responding to Hurricane Irene and the damaging October snowstorm in 2011. 

PURA reduced the amount those companies could recover by nearly $50 million, and reduced the regulated return on equity from 9.17 to 9.02 percent as a result. Tong’s office argued that Eversource was responsible for ensuring smooth communication with towns and customers, and that it should face similar penalties for its response to Isaias.

Make Safe and community liaisons

In Killingly, two roads were completely blocked for 48 hours – one a dead-end street and the other a through street blocked at two points — trapping the residents and blocking emergency services. 

In Madison, it took a week to ensure all downed wires were safe and all neighborhoods were accessible. 

In Plainfield it was five days before all roads were accessible. 

A common complaint from towns served by Eversource was that the utility failed to send “Make Safe” crews at once to help local public works crews clear roads of downed power lines.

In rural areas where people rely on well pumps and septic systems, that meant they were effectively stuck with no running water, no air conditioning, no refrigerator and nowhere to go during one of the hottest weeks of the summer.

“If this had been an ice storm in January, we would be facing dire consequences,” Pomfret First Selectman Maureen Nicholson wrote to PURA.

Madison First Selectwoman Peggy Lyons told PURA that in past storms, Eversource had a Make Safe crew positioned locally to start working with town first responders to clear blocked roads as soon as the weather was safe for work.

During Isaias, Madison submitted a list of over 50 blocked roads to Eversource shortly after the storm subsided on the evening of Aug. 4. Instead of sending a crew to start clearing those roads, Eversource’s liaison with the town told local officials the company was only handling “life threatening” calls that night. The next day, Lyons said they were told no crew would be coming because the company was moving into “full restoration mode.”

“This meant that our first responders were left standing on the sidelines, unable to safely clear downed wires and provide emergency access throughout many parts of our town,” Lyons wrote.

Eversource insisted that it had started work on the highest priority situations immediately after the storm passed. Company officials claimed that the restoration of power would have been delayed by 2 or 3 days if it had sent Make Safe crews to each town immediately.

“In places, the Company’s actions did not meet expectations where they should have,” Eversource told PURA in its final brief. “In places, expectations did not align with feasible and/or reasonable action by the Company.”

Company officials claimed that the towns, Tong’s office and the Department of Energy and Environmental Protection all either misunderstood or misrepresented Make Safe protocols, which Eversource said are determined by the state, not the company.

The Make Safe program is meant to address the highest priority cases of roads completely blocked by downed wires. Eversource said it doesn’t have to provide Make Safe crews for any other reason.

Community liaisons

While town leaders generally agreed that Eversource liaisons made a good faith effort to do their jobs, they simply didn’t have access to the information towns needed.

Killingly Town Manager Mary Calorio told PURA that Killingly was assigned a new liaison four times in the first 48 hours after the storm – a critical time for clearing roads of wires and debris. 

Other towns complained that liaisons had to proceed through a chain of several people to obtain any information from the company’s operations center, in the process watering down the urgency local requests.

Eversource admitted that it “could have done a better job” communicating with towns, but said it still met regulatory standards and couldn’t help that people were more stressed because of the pandemic, hot summer and recent rate hike.

According to company filings, Eversource liaisons worked from home under COVID protocols, and many lost power and had to have another liaison cover their towns. Eversource also had to call in the help of 85 liaisons from Massachusetts and New Hampshire to help — something it hadn’t ever done before.

Company officials said that when the damage from a storm is so widespread that there multiple issues in each of the 149 towns it serves — using 2,500 different line crews — “areas of improvement” in communication are inevitable. But having areas to improve does not mean the company failed, company officials said. 

Communication breakdown

Despite spending $23.7 million to upgrade communication systems since 2014, communication with customers experienced intermittent failures that compounded customer anxiety, Tong’s office said.

The company had stress-tested its communications systems to ensure that it could handle 20 percent more contacts than during Hurricane Sandy. The actual volume of calls during Isaias was more than triple Sandy.

A family in Wilton said they couldn’t report an outage because their phone number wasn’t linked to their account, and waited without a working well pump for eight days before their power was restored. 

Other residents said they had problems reporting outages, in part because they couldn’t access the internet. Others were told that power had been restored when it was not.

Eversource denied that its communications “failed,” insisting that there was no point where its systems weren’t operating, and that customers were able to communicate with the company and report outages. Eversource  also said that “capacity constraints” on its reporting systems didn’t hinder its restoration efforts because it was still able to record and map customer outages. 

According to the Office of the Attorney General, communication issues have been a persistent problem for Eversource since at least 2011 when Connecticut Light & Power customers were met by busy signals when they called after the snowstorm that year. 

Tong highlighted more problems after an October 2017 wind storm where some customers were unable to report outages through some channels, or had inaccurate restoration times, or were told their power had been restored when it had not.

Eversource argued these problems were unrelated, and that it had successfully recorded outages from 5.9 million customers since 2016, with only a “handful” of complaints from about 100 customers to PURA. Those complaints, company officials argued, should not be considered in the decision because they were not “tested by cross examination or rebuttal testimony.”

Eversource’s explanation for its communication failures centered on the unique circumstances of working in a pandemic. 

“Information systems are complex organisms and there is no system that the Company can install that will guarantee that there will not be performance issues over time when the system is under pressure,” Eversource said. “Moreover, even if that were possible, the cost to customers would be very significant.”