In its first electricity rate case since Marissa Gillett stepped down as chair of the Public Utilities Regulatory Authority, the state regulator approved a 17% increase in delivery rates for United Illuminating, effective November 1.
According to the Office of Consumer Counsel, the decision will add $13 to the monthly bill of an average residential customer who consumes 700 kilowatt hours. UI confirmed to CT Examiner that it had not yet calculated the decision’s impact on each customer class. The utility has until November 11 to submit its rate design.
In response, Connecticut Attorney General William Tong linked the decision to Gillett’s departure in a written statement.
“After months of relentless legal attacks, United Illuminating succeeded in running off its chief regulator,” Tong said. “For those who spent these last months fixated on personalities and politics, this decision is a stark reminder of what this fight was always about. It was about millions upon millions of dollars that Connecticut families will now pay to increase United Illuminating’s bottom line.”
The increase was approved by commissioners David Arconti and Michael Caron. Although Gov. Ned Lamont nominated four new PURA members last week, only two participated in the meeting when the rate case was discussed — and neither voted.
“This isn’t perfect by any means,” Caron said, “but I fully believe that it gets the rates right with the revenue that is sufficient, but no more than sufficient to prudently manage the system.”
“Rate cases are never easy,” Arconti said. “However, I believe this final decision reflects thoughtful analysis supported by the evidence in the record and supports long-term stability.”
The new chairman, Thomas Wheil, recused himself given that he had been involved in the case in his former role as Legal and Regulatory Director at the Office of Consumer Counsel. Commissioner Jenice Beecher said she had joined the agency that same day and had not had a chance to familiarize herself with the case, and abstained.
Tong told CT Examiner that his statement was not a criticism of the new commissioners.
“I have respect for the experience and expertise of the new commissioners and hope they will work just as hard to hold the utilities accountable,” Tong said in an email.
Rob Blanchard, Lamont’s spokesman, didn’t respond to a request for comment on Tong’s statement.
UI is the second-largest electric utility in the state and serves approximately 350,000 customers in the greater New Haven and Bridgeport areas. The company declined to comment on PURA’s decision.
PURA authorized a $66 million increase in the company’s annual revenue. UI had requested a $105 million increase, 27% more than the amount authorized in the previous 2023 rate case.
In its filing, UI said the raise was intended to compensate for alleged methodological deficiencies in the previous case, costs that could not be recovered at that time, inflation and other factors affecting its operations, including environmental remediation and changes in capital market conditions.
A rate case is the legal procedure through which public utility companies request adjustments to their authorized revenues, which determine the rates they can charge their customers. This only affects the local delivery portion of the electricity bill, while other items —supply, transmission and public benefit charges— remain unchanged.
UI’s last rate case was in 2023, when the company received a cut in its revenue instead of the increase it had requested. The utility challenged the decision and lost in Superior Court, but the case remains under appeal.
Rate cases were the central point of friction between former PURA chair Gillett and the utilities during her six-year tenure. After taking office in 2019, Gillett pushed for what she said were necessary reforms to Connecticut’s utility oversight, toughening criteria for rate cases and taking a more aggressive stance toward the companies she regulated.
Gillett resigned on October 10 after turbulent months in which her lack of transparency in managing PURA was questioned. The utilities criticized her for what they claimed bias was against them, leading to a number of legal battles.
In a rate case, PURA authorizes revenue for the company based on demonstrated costs and investments —called the rate base— in addition to return on capital. That allowed revenue determines what the company can charge its customers.
To establish the rate base, UI must demonstrate that it made investments that are useful and that the capital was invested prudently. PURA declined to include certain investments in this year’s rate base, finding that the company failed to offer adequate justification for their reimbursement.
PURA also approved a return on equity of 9.25%, a modest increase but significantly lower than the 10.5% requested by the company.
The case took 350 days, during which hearings and audits were held and parties were able to present their positions. The Office of Consumer Counsel, the Department of Energy and Environmental Protection and the Attorney General opposed the company’s request to increase its revenues, questioning some of the investments included in the rate base and the requested increase in return on capital.
Following the decision, Tong criticized the decision in part for halving the penalty imposed on UI for failing to fulfill public commitments to clean up English Station in New Haven.
Consumer Counsel Claire Coleman lamented parts of the decision and called on the company to stop appealing PURA’s ruling.
“While it is disappointing that some of the cost reductions and accountability measures that my team advocated for were not retained in the final decision, we acknowledge the result reflects the consensus reached through deliberations of the voting commissioners during particularly challenging times,” Coleman wrote. “Given that the final decision gives UI more revenue than the company’s own stated bottom line for providing safe and adequate service, I hope that UI will accept the decision rendered by its regulator and cease its practice of filing a battery of appeals.”