Eversource and United Illuminating were warned today that each could pay millions of dollars in fines for what regulators say are failures to respond appropriately to Tropical Storm Isaias last August.
On Thursday, both companies were issued notices of violations for what regulators at PURA say are failures to comply with performance standards and accident reporting requirements set by state law.
Eversource faces fines totaling $30 million and United Illuminating faces fines of $2.1 million. The authorities can request a hearing to dispute PURA’s findings.
The fines can be implemented in multiple ways, including as a customer bill credit, according to PURA. How exactly it is implemented will be outlined in PURA’s final decision, expected in July.
Repeating the findings of its investigation into the utilities’ response to the storm last August, PURA said it was penalizing Eversource after regulators found that the company did not properly monitor the strength of Tropical Storm Isaias as it approached Connecticut, did not secure enough line crews to respond, and didn’t properly communicate restoration times to customers or communicate with town leaders on road-clearing efforts.
PURA said it is penalizing United Illuminating for not having a timely response to priority safety concerns from municipal leaders, and for failing to provide Bridgeport with a “Make Safe” crew in a timely manner.
Both utilities were penalized for failing to report accidents related to the storm recovery, according to PURA.
It is the second instance in two weeks where PURA has hit the companies with financial penalties for their response to Isaias. In a scathing report last week that outlined the utilities’ failures to properly prepare for the storm and communicate with customers and municipal leaders during the restoration, regulators cut their fixed rates of return.
Eversource’s return on equity was cut from 9.25 percent to 8.95 percent, and United Illuminating was cut from 9.1 percent to 8.35 percent. Based on their 2020 revenues, that would be a $25 million penalty for Eversource and a $1.3 million penalty for United Illuminating, according to PURA.
That penalty will reduce the base distribution rates the companies charge to customers, meaning that customers will pay less and the companies will make less, according to PURA.
All told, Eversource is now facing up to $55 million in penalties and United Illuminating is facing penalties of up to $3.4 million. In 2020, Eversource made $1.2 billion in profit, and United Illuminating parent company Avangrid made $581 million.
Together, the penalties could reduce distribution rates by roughly $1.50 a month for the “average” residential Eversource customer using 700 kilowatt hours a month, and roughly 50 cents a month for United Illuminating.
The utilities face an additional financial penalty depending on how much of their storm recovery costs regulators approve to pass on to their customers. PURA is still reviewing that issue, but has indicated the companies will not be allowed to recover a significant portion of those costs.
Correction: The original version of this story reported that Eversource faced up to $45 million in fines. The correct total is $55 million.