Connecticut’s Public Utilities Regulatory Authority (PURA) announced on December 14 that approved a final decision that reduces by about $39 million a $98-million revenue increase request filed by United Illuminating (Docket No. 16-06-04) in July.
United Illuminating, a subsidiary of Avangrid, serves about 330,000 residential, commercial and industrial customers in the Greater New Haven and Bridgeport areas.
In its original application, the utility had requested a rate increase of nearly $100 million to address predicted “operating deficiencies” of approximately $66 million in 2017, $20 million in 2018, and $12 million in 2019. If that filing had been approved, the average residential customer would have seen a $9.34 monthly increase in year one, a $9.50 monthly increase in year two, and an $11 monthly increase in year three.
However, the proposal was not well-received. At PURA hearings on the filing, 33 intervenors provided testimony to the regulators. State Senator Joseph Crisco (D- 17th District) questioned the rate increase after UI’s December 2015 merger with Iberdrola USA. He noted promised cost savings that were supposed to be in effect due to the merger – urging the commissioners to reject the increase and asserting that the state could not afford higher rates.
Public comments were similar. Overall, ratepayers were particularly opposed to the 30 percent increase proposed by the utility to the customer service charge, the base amount that most residential customers pay for access to and maintenance of the electric grid – from the current $17.25 to $18.74. A representative from the Connecticut Fund for the Environment discussed energy policies that already are in place to conserve resources by avoiding unnecessary consumption and maximizing efficiency. The speaker contended that UI’s policies penalize Connecticut residents for using energy more efficiently by raising the fixed customer service charge.
PURA’s ruling will provide a revenue increase of about $43 million in 2017, and increases of roughly $11.5 million in 2018 and $2.9 million in 2019. The ruling also reduces the company’s return on equity (ROE) to 9.10 percent from the present rate of 9.15 percent, finding it to be “fair and reasonable, and sufficient for UI to fund capital improvements to upgrade its distribution system and continue to modernize its systems, processes and workforce.”
PURA estimates that the overall monthly rate impact on an average residential customer will be approximately 3.25 percent beginning in 2017. Under UI’s original proposal, residential customer rates were estimated to increase by roughly 5 percent in each of three years, starting January 1, 2017.
PURA Vice Chairman John W. Betkoski, III, the lead commissioner in the UI proceeding, stated, “PURA’s ruling strikes an appropriate balance between UI’s need for revenue to maintain a reliable, safe system with customer expectations for fair and reasonable rates.”