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Attorney General William Tong

04/16/2021

Attorney General Tong Responds to PURA Draft Decision Rejecting Rate Stability for United Illuminating Customers

PURA Plan Adds $2.4 Million New Cost to Ratepayers, Rejects UI Voluntary Contribution, and Enables UI To Immediately Seek Rate Increase

(Hartford, CT) – Attorney General William Tong responded today to a draft decision by the Public Utilities Regulatory Authority rejecting an agreement with United Illuminating that would have provided a $46.5 million COVID relief bill credit to decrease and stabilize electric rates into 2023. PURA’s alternative draft adds $2.4 million in new costs to ratepayers, while also rejecting a $5 million voluntary contribution from UI. PURA’s move also enables UI to immediately apply for an increase in rates.

Attorney General Tong and Governor Lamont announced an agreement between the State of Connecticut and UI last month that would have fully offset what would have been a five to eight percent increase in bills on May 1, 2021 due to federally-mandated transmission charges and the costs of the Millstone power purchase agreement. The settlement included a $5 million voluntary contribution from UI’s own coffers, and also accelerated the return of $41.55 million of accumulated savings from federal tax cuts ahead of what would have otherwise been required. In addition, UI agreed to not change base distribution rates until at least May 2023—an agreement that could have saved ratepayers a projected $20 million above and beyond the $46.5 million COVID credit. UI would now be eligible to immediately apply for a distribution rate increase.

In a draft decision issued Wednesday evening, PURA turned down the $5 million in voluntarily contributed funds from UI, as well as UI’s commitment not to change base distribution rates until at least May 2023 to provide stability for consumers. PURA’s draft maintains the expedited return of the tax savings proposed in the settlement. In rejecting the $5 million in UI shareholder funds, PURA opts instead to spread the cost over a five year and eight month period, adding a 3.25 percent prime interest rate which will vary per year. Their plan will provide marginal immediate relief to ratepayers while ultimately adding significantly to costs in future years.

“PURA got this wrong and I strongly urge them to reconsider. I do not understand why they rejected a settlement that does so much to help Connecticut families squeezed by the cost of electricity. Their plan will provide a marginal immediate savings to ratepayers, but at the expense of millions of dollars in new charges to Connecticut families who simply cannot afford to pay more down the road. This just doesn’t make good sense to me, especially when United Illuminating was willing to contribute their own money to avoid this problem. Connecticut consumers pay far too much just to keep their lights on, and we all needed the rate stability that this deal would have provided. This is just a draft decision, and I am hopeful that with further analysis and deeper understanding, PURA will change course,” said Attorney General Tong.
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Elizabeth Benton
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