Regulators Condemn Eversource and UI Storm Response, Cut Fixed Rates of Return

In uncharacteristically strong language, state utility regulators condemned Eversource and United Illuminating and ordered changes and financial penalties for their responses to Tropical Storm Isaias last August.

The board of PURA — the state’s regulator of utilities — on Wednesday unanimously affirmed the findings of the authority’s investigation into the utilities’ responses to the damaging storm that left hundreds of thousands of people without power, some for over a week, last summer.

The authority found that Eversource failed to sufficiently prepare to respond to the storm, in particular failing to secure enough outside help in the early days of the storm response, and failing to communicate clearly with municipalities and customers. 

United Illuminating failed to coordinate emergency response efforts in Bridgeport, PURA found. Both utilities also failed to inform PURA about accidents that occurred during or after the restoration process.

PURA Chairman Marissa Gillett said during the meeting that what regulators found in its investigation was a company acting as a corporation rather than a public utility with a legal obligation to provide essential services to its customers.

“Unfortunately, we find ourselves with much more than a public image problem on our hands,” Gillett said, seemingly a response to the comments new Eversource CEO Joseph Nolan made to the New Haven Register when he took over the position of James Judge earlier in April. “Our public utilities, and Eversource in particular, have failed us, and continue to fail us by putting shareholders above the rights and good of the citizens of Connecticut.”

Gillett laid out the penalties and corrections that PURA is ordering for the electric utilities, including:

  • Eversource and United Illuminating must increase the number of line workers, damage assessors, liaisons and other emergency response personnel 
  • Eversource must improve its communications with community leaders, large customers and customers with medical hardships
  • Eversource and United Illuminating must complete comprehensive management audits, and will not be able to pass the costs of those audits on to customers

Both companies will also have their fixed rates of return on equity reduced — United Illuminating by 0.15 percent, and Eversource by 0.9 percent — which is expected to cost the companies millions of dollars.

The state’s regulator will also consider whether to impose civil penalties on either company, Gillett said. She said that neither company has asked yet to charge customers for the storm recovery costs, but if and when they do, PURA’s decision will prevent them from recovering certain costs.

Eversource Spokesman Mitch Gross said in a statement that the company stands by its response to Isaias, and that its thousands of employees showed “skill and dedication” to restore power to customers as quickly as possible.

“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,” he said. “Today’s decision deserves careful consideration and review and we are committed to moving forward in the best interest of our customers.”

United Illuminating spokesman Ed Crowder said the company was disappointed that the ruling doesn’t “fully reflect” the facts the company presented, and that it imposes a penalty despite finding that the company “generally met the standards of acceptable performance.”

“We are mindful of the deficiencies cited by PURA, and are well aware of the difficulties that extended outages cause for our customers,” Crowder said. “However, we believe the facts clearly support that UI faithfully followed its Emergency Response Plan, and met the overall targets therein.”

PURA Commissioner Michael Caron said the authority’s decision is not an indictment of the many utility employees who worked long and arduous hours to restore power to customers. Eversource and United Illuminating are competent “blue sky companies,” but repeatedly fail at storm response, he said.

“When it comes to showtime, and the spotlight goes on, Eversource in particular proceeds to cower in the corner,” Caron said. “Worse, decade after decade, it’s the same usual suspects: lack of preparedness, lack of communication, lack of coordination, or lack of timely restoration.”

Caron said the lack of communication with municipal “Make Safe” crews was “appalling,” as was the story of a dog electrocuted by a live wire several days after the storm. Caron said that his brother, Jamie Caron, was electrocuted during a construction accident in 1993, and he was thankful that downed wires were not more deadly after Isaias.

“Thank god it was not a child. A child, or more likely an adolescent can see something dangerous as a challenge or a rite of passage,” Caron said. “We’re all lucky no one tried to jump over a live wire.”

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