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HARTFORD – A bill that would make sweeping changes to tighten how Connecticut’s utilities are regulated passed the State Senate early Friday, which the state’s chief utility regulator praised for improving accountability.
The bill makes a long list of changes to how utilities are regulated, which State Sen. Norm Needleman, D-Essex, chair of the Energy and Technology committee, said are aimed at making sure the utilities are earning the money they make off Connecticut customers.
“Let’s prioritize the interests of millions of ratepayers,” Needleman said. “They deserve reliable electricity at a fair price, and utilities that are responsible to the needs of their ratepayers.”
Behind-the-scenes negotiations wrapped up Thursday, resulting in a 79-page bill, shortly before it was brought up for a midnight debate in the Senate.
After spending hours in a contentious debate over a voting rights bill, debate over changing energy regulations was decidedly low-key, starting with Needleman’s brief summary of the bill’s key provisions.
“I was waiting for all the other people to jump up and debate energy policy at 12:04 on a Friday morning,” Senate Majority Leader Bob Duff, D-Norwalk, said just before the vote. “No takers.”
The bill passed the Senate 35-0, with State Sen. John Kissel, R-Enfield, an Eversource corporate attorney, abstaining from the vote.
Senate President Pro Tem Martin Looney, D-New Haven, said Connecticut made a mistake in 1998 by “deregulating” the state’s electric utilities, forcing them to sell off their power plants and run as private, but heavily regulated, companies with control only over the distribution system.
The idea at the time was to promote competition to lower prices, but Looney said eager lawmakers didn’t take time to evaluate the consequences. Now, he said, they have utilities that act like any other private business.
“Part of the problem with the utilities, I think in some cases, is that they are guaranteed a profit. They operate in a market that is pretty much guaranteed to them,” Looney said. “It’s not like a car company operating in a market where there are other sellers and manufacturers of cars that they have to compete with. And yet, they seem too often to have a mindset as if they were completely a private business operating in the way other businesses are.”
In a statement, United Illuminating expressed little enthusiasm for the bill, saying it has “come a long way” thanks to lawmakers listening to the company’s concerns, but saying there are still issues that need to be addressed.
“At a time when our state’s over-reliance on volatile fossil fuel markets is harming residents across Connecticut, our collective focus should be on supporting and enhancing our local workforce, rapidly accelerating the energy transition and driving investment in the clean grid of the future,” United Illuminating spokesman Craig Gilvarg said. “We hope the General Assembly will refocus on those urgent priorities as it continues to consider this legislation.”
Eversource said it would comment on the bill after it passes the House.
Will customers see a difference?
Public Utilities Regulatory Authority Chair Marissa Gillett told CT Examiner on Friday that she thinks the changes will have an impact on customer bills. How much is harder to say, she said, partly because of something the bill seeks to address – the state’s tendency to resolve utility issues with secretive “black box” settlements, a practice with which Gillett has been vocal about her concerns.
The bill would set a clear legal standard for when PURA can reject settlements, and would allow the regulator to require evidence in support of any settlement to make sure it’s in customers’ interest.
It also prevents indefinite settlements that delay rate cases where the utilities open their books to PURA for review, and allows PURA to call utilities in for a rate case rather than having to wait for the companies to apply for a rate change, Gillett said.
Consumer Counsel Claire Coleman praised lawmakers for including “clear limits” in the bill on what utilities can charge their customers for – banning them from charging for the costs of a rate case, as well as for lobbying, marketing, travel and entertainment expenses for company directors and executives.
“Ratepayers simply should never be paying these utility company bills,” Coleman said.
PURA has stopped companies from charging for some of those costs already. In a recent rate cut they ordered for Aquarion Water, the regulator stopped the company from charging $300,712 for industry membership dues, $81,491 in charitable donations and $37,812 in entertainment expenses.
It also rejected the company’s request to charge for a company suite at Total Mortgage Arena and seats at Hartford Healthcare Amphitheatre in Bridgeport.
While PURA was able to stop those charges, it had to prove they were unnecessary; and outlining it now in law frees up time to put more scrutiny on other costs, both Coleman and Gillett said.
Utility leaders argued in February that lawmakers were looking in the wrong direction by changing how they’re regulated, when they should be focused on New England’s winter constraints on natural gas that set the stage for massive hikes in electric supply costs this winter.
But Gillett said customers will see the bill, if adopted, reflected in their statements once PURA is able to have rate cases with the new tools available to them.
“It’s difficult to put dollars and cents to it now for the reasons we talked about, but we would be able to tell you after we go through a rate case,” Gillett said.
The bill also calls for PURA to investigate low-income rates for water and gas customers, like it recently approved for electric customers as part of the Take Back Our Grid Act.
One change she said she believes will be especially significant is a new program that would offer up to $1.2 million a year for groups representing residential or small business customers to intervene in rate cases.
Already practiced in other states, the idea is to give customers resources to argue against the teams of lawyers utilities deploy to make their case to PURA. Gillett has frequently advocated for the public to get more involved in rate cases, since PURA can only decide cases based on the evidence they’re presented.
“Having an attorney and an expert witness is really the only way that you’re really going to be able to go toe-to-toe with other participants in the proceeding,” she said.
Panel of one
The only pushback before the Senate approved the bill came from the former Energy Committee chair, State Sen. John Fonfara, D-Hartford, who questioned a section he said appeared to give one member of the three-person PURA board the power to decide on any issue, including a rate case, without a public hearing or the vote of other commissioners.
Needleman assured Fonfara that the section would only allow one commissioner to lead a study that the legislature asked PURA to conduct, and that “contested cases” like a rate proceeding would still require the vote of the full board.
But Fonfara said whether the section is “not well-written or otherwise,” it appears to give one commissioner broad, unilateral powers, and cautioned it was a dangerous path. Lawmakers never know who could end up sitting on the PURA board, and what decisions they could make on their own, he argued.
“No law should be based on personality,” Fonfara said. “No law should be made based on an inclination of a particular commissioner that you might agree with today.”
Gillett told CT Examiner on Friday she was surprised by Fonfara’s concerns, because it was changing the law back to what it was before 2019, when lawmakers expanded PURA’s board from three to five members. Though, the two new positions have never been filled.
She explained it wouldn’t let one commissioner decide on every issue. State law directs what kinds of decisions need to be “contested,” where the utilities have the right to argue and decisions are voted on by the entire board, she said.
“If the sole concern here is that a commissioner is going to go rogue and then vote on everything themselves, I just don’t think that’s a fair concern considering it’s the legislature’s full authority to decide what is a contested proceeding and what’s not,” Gillett said.
Gillett, who came to Connecticut from the Maryland Public Service Commission, said she’s advocating for Connecticut to adopt “best practices” from other state utility commissions, something she believes was her mandate when Gov. Ned Lamont appointed her to PURA.
“It’s flattering to think they put this bill forward as an endorsement of me, but I think that misses the bigger picture,” Gillett said. “This bill is not about me, it’s about pulling in best practices from other jurisdictions. I pointed some of those out to them, but it’s grounded in best practices, not something that is designed to only work with me in place.”