To the Editor:
This Friday, state regulators are poised to move the goalposts—while the ball is in midair. At least, that is what the Public Utilities Regulatory Authority (PURA) currently proposes to do in the United Illuminating (UI) rate case. Nearly a year ago, UI submitted thousands of pages of documentation supporting its case. Yet PURA waited until the eleventh hour to announce it has in mind brand new standards by which to judge UI. That may be within PURA’s rights. But what PURA should avoid is a rush to judgment.
Given the potential new standards, PURA should take the time needed to fairly evaluate this complex decision and postpone its August 25th vote. That grace period would give due process a chance.
I am very familiar with the complex challenges PURA faces. For over four decades, I have practiced regulatory and administrative law. As a young attorney in Tucson, Arizona, I took an oath to uphold the integrity of the legal process. I began my career representing taxpayers against the Internal Revenue Service.
I then had the honor of serving four terms in the Arizona state Senate, six years as a state public utility commissioner, and five years as a Commissioner at the Federal Energy Regulatory Commission.
I relay my misgivings here with respect and humility as I do not represent any parties in this dispute, nor am I a Connecticut resident, though over the course of my career I have worked alongside many capable and dedicated public servants from Connecticut.
Given these past experiences, I am deeply respectful of PURA and the important duties it undertakes. Rate cases are complex and grounded in the public interest, unlike everyday litigation.
Electric distribution companies have been regulated as public utilities since the days of Thomas Edison—a system that requires regulators to consider and balance the interests of multiple stakeholders and then render a decision in the overall public interest. The electric service those utilities provide should be affordable, reliable, and environmentally sustainable.
Regulators, accordingly, may not allow utilities to over-earn, but their revenues must be adequate to attract the financing and investment necessary to ensure a grid that citizens can count on. And the proper operation of the grid is today a moral imperative.
All parties to utility rate cases on these topics are entitled to a hearing that is fair. I express no views on the ultimate outcome here, but forging ahead this Friday would not be fair. PURA’s draft decision proposes to change midstream the legal standards for assessing UI’s costs and return on capital investment—after the evidence had been submitted at hearing.
Regulatory agencies, to be sure, are granted by their legislatures wide authority to impose legal standards on utilities, and if they stray too far the courts can rein them in. During my tenure as a utility regulator, I did feel it appropriate at times to revise legal standards on a looking-forward basis, often through a rulemaking under administrative procedure statutes. The draft PURA decision, however, upsets the applecart after the evidentiary record has closed.
This goes beyond changing the rules in the middle of the game and is more akin to changing the scoring after the game has been played. At minimum, the parties need a time-out to evaluate and address the new standards.
Lawmakers often hear the saying “legislate in haste, repent at leisure.” Given the high stakes and intense public scrutiny of rate cases, that adage is worth heeding here. I have been an attorney on both sides of the dais, but nothing in my tenure as regulator compares with the complex challenge presented by a 2023 utility rate case. My suggestion in this proceeding is that all sides pause to “take a deep breath.”
I sympathize with all the stakeholders putting on their evidentiary cases under today’s conditions. A power grid that provides 24/7 electric service is essential to our way of life. At the same time, climate change is spurring an energy transition starting with how we generate, transmit, and distribute electricity. Rampant inflation already imposes burdens on businesses and homeowners that use electricity, and PURA is reasonably focused on prices. But utilities face the same inflationary challenges for steel, wire, bucket trucks, and sundry other building blocks needed to maintain grid reliability in the face of now too common extreme weather events.
Now is not the time for a rush to judgment. Like the rest of the country, Connecticut is in the midst of a complex energy transition. PURA has proposed at the last minute to switch the standards that govern this transition—after the record has closed—and then slam the book closed on UI’s rate case without providing the process necessary to evaluate the issues at play. This haste would be an injustice not only to UI and its hundreds of Connecticut employees but also to the very foundations of regulatory fairness and ultimately to the people of Connecticut.
Marc Spitzer is attorney for Edison Electric Institute, a trade association for investor owned utilities