UI Taking State to Court Over Rate Hike Denial


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United Illuminating said its profits could be cut in half after state regulators rejected its request to raise rates, and is appealing to the courts to step in.

The company said in a news release Monday that it will appeal the Public Utilities Regulatory Authority’s decision to reject almost all of its request for a rate hike, arguing the decision contradicts evidence in the record and will lead to “unprecedented financial harm” for UI.

UI, which serves about 341,000 customers across 17 municipalities in Fairfield and New Haven counties, asked for a rate hike that would increase customer bills by about 11 percent and increase its revenue by about $131 million. But last month, PURA rejected UI’s request, saying the company didn’t do enough to prove it needed the rate hike.

It marks the second case this year where a utility has appealed PURA’s decision to reject a rate hike. Eversource subsidiary Aquarion Water appealed after PURA ordered the company to cut its rates instead of raising them; State Superior Court Judge Matthew Budzik ordered a stay to halt the rate cut until the appeal is resolved.

In its release, UI argued that PURA’s order denied its ability to charge customers to cover the cost of $118 million worth of infrastructure work, and will cause the company to lose $31.9 million a year – about half of Its total income of $60 million in 2022.

UI further stated that PURA’s decision will force the company to defer investments in the electric distribution infrastructure, critical substations, its vehicle fleet, investments to ensure a safe work environment and investments to increase the grid’s capacity to allow widespread electrification and reduce outages.

In its release, UI said PURA “arbitrarily changed its expectations,” and as a result said the company couldn’t recover costs of infrastructure it already built.

“At no time during the year-long rate proceeding did PURA indicate that the information we provided would be insufficient to meet their standard,” UI spokesperson Sarah Wall Fliotsos said in the release. “The Authority called the decision a ‘roadmap’ for utilities to follow as they transition to a performance-based ratemaking standard. However, roadmaps are put in place before a journey is taken, not afterwards.”

The company also took issue with public officials who said the decision protects Connecticut electric customers. While celebrating PURA’s decision, state lawmakers and regulators haven’t taken action on the “immense” increase in energy supply costs over the past year – which UI said is the true driver of high energy costs in Connecticut.

Connecticut electric customers have paid some of the highest electric bills in the country for years, but spikes in natural gas costs caused supply rates to skyrocket last winter. This left customers with average bills of almost $230 in January, up more than 15 percent from January 2022.

“Those costs, which are set by out-of-state generation companies, have increased more than 150 percent over the last three years, with the typical Connecticut family seeing a price spike on their monthly bill of nearly $80 this past winter, accounting for nearly 70% of their electric bill,” Wall Fliotsos said in the release.