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Billing customers for pet sitting, and failing to clean up an abandoned power plant in New Haven, were some of the reasons Attorney General William Tong and Consumer Counsel Claire Coleman cited for urging state regulators to reject a request by United Illuminating for an 8 percent rate over three years.
A brief Tong filed with the Public Utilities Regulatory Authority on Thursday argued that United Illuminating’s request to increase its electric distribution revenues by $130.7 million over the next three years is “bloated” and not supported by the company’s arguments.
The brief highlights an array of costs Tong said were inappropriate for United Illuminating to pass on to its 341,000 customers in New Haven and Fairfield counties — including a request to set a significantly higher return on equity than the state’s other utilities, about $1.5 million a year for “incentive” bonuses for employees, and a $14.7 million solar and battery project on Bridgeport’s Pleasure Beach Island — which Tong said has two electric customers.
“[United Illuminating] failed to demonstrate, as it must, that its proposed distribution rate hike up to 8 percent in the first rate year is necessary to provide safe, adequate, and reliable electric service,” Tong argued.
In a statement provided to CT Examiner, a United Illuminating spokesman disputed Tong’s figures — writing that the company was asking for a 4.9 percent rate increase, the first distribution rate hike it has requested since 2016. In August, the company estimated that its average residential electric customer could see their bill increase about $9.69 a month if its request to increase distribution rates were approved.
The spokesman said that the company had been transparent with its request for a rate hike, had responded to an “unprecedented” number of queries throughout the process, and demonstrated to regulators that its investments in the grid would lead to long-term cost savings and a more resilient grid.
The company also pointed blame at “out-of-state generation companies” for more than doubling the cost of electricity supply this winter “with zero transparency or accountability.”
“UI stands ready as a partner to address the real issues facing Connecticut families, but restricting critical investments in grid infrastructure is not the answer the state or its residents need.”
Under Marissa Gillett, PURA has been generally aggressive in pushing back against recent requests to raise rates — mostly recently ordering a rate cut for Aquarion Water customers rather than a requested rate hike that would have raised the water company’s revenues by 28 percent. At the time, Gillett signaled stepped-up scrutiny of utility requests, promising that the state regulator would require the companies to prove that any rate increases were the result of needed spending.
Thursday’s brief by the attorney general argues that United Illuminating had not proven the benefit of spending $48.1 million on “clean energy transformation” projects – many lacking a cost-benefit analysis. Those projects include a proposal for a $31.2 million “electric vehicle charging hub” meant to serve interstate highways which Tong claimed would extend beyond the company’s service territory and lacked sufficient detail.
Tong also criticized United Illuminating’s request to charge customers between $50,000 to $60,000 a year to fund a “caregiver program” for the company’s employees, most working a hybrid schedule with two days a week at home.
The caregiver program includes “back up care” for child or adult dependents, as well as back up care for pets that includes dog walking and house sitting. Office of Consumer Counsel consultants Helmuth Schultz and John Defever said the program is not a standard benefit for employees in the industry.
“The company failed to show that customers benefit from UI employee childcare, elder care and pet care,” Tong said.
In a brief, Coleman outlined reasons PURA should cut more than half of the additional revenue requested by United Illuminating, including an employee incentive program the company asked to charge customers between $1.495 and $1.618 million to fund.
Coleman said incentive compensation is a tool companies can use to retain and attract talented employees, but United illuminating paid an incentive to every single employee between 2017-2021. Since every employee can assume they’ll be given a bonus, it likely doesn’t provide an incentive, and doesn’t benefit customers, she argued.
“To the extent [United Illuminating] finds that shareholders receive a benefit, they should pay for it,” Coleman argued.
Tong also urged PURA to penalize the company $2 million a year until it remediates English Station, an abandoned coal- and oil-fired power plant in New Haven. He said the company committed to cleaning up the plant “regardless of cost” within three years of a 2015 settlement approving Spanish energy company Iberdrola’s takeover of United Illuminating parent company Avangrid.
“The record calls into question [United Illuminating]’s commitment to local control, and … UI’s slow remediation pace and frequent change of Project Managers call into question UI’s commitment to this critical remediation project impacting the local community in New Haven,” Tong said.
In a follow-up, United Illuminating spokesman Craig Gilvarg said the company’s obligation to clean up English Station is unrelated to the rate case, and the costs of the remediation are paid by shareholders, not customers.
The company told CT Examiner that it is committed to its agreement to “help clean up English Station.”
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This story has been corrected to reflect that Tong urged a $2 million penalty