PURA Ruling Sets Distribution Rates for United Illuminating Customers
Decision establishes new economic development rates
(New Britain, CT – August 25, 2023) – The Connecticut Public Utilities Regulatory Authority (PURA or the Authority) today approved a Final Decision that rejects The United Illuminating (UI) Company's proposed distribution rate increase of $131 million over three years. Instead, the Final Decision authorizes an increase of $22.957 million, which results in an average increase in base distribution rates of about 6.6% and an average increase in customer bills of about 2% compared to current levels.
Today’s ruling in Docket No. 22-08-08 also determines a myriad of issues pertaining to cost allocation, rate design, revenue adjustment mechanisms and customer service. The PURA commissioners unanimously approved the decision at today’s Regular Meeting in New Britain.
Under the Decision, the Authority approves an annual revenue requirement for UI in the amount of $384.865 million for the rate year starting on September 1, 2023. This represents an increase of $22.957 million from UI's currently approved base distribution revenue requirement from which the company had sought a $131 million increase, or approximately 35%, over three years.
PURA also determines that an allowed return on equity (ROE) of 9.10% is appropriate. However, the Authority reduces the allowed ROE by an aggregate 47 basis point reduction, or 0.47%, subject to certain conditions and timelines, to address performance and management issues. UI requested a 10.20% ROE.
The ROE and revenue requirement were found to be appropriate as the Authority determined that UI did not meet its burden of justifying the requested revenue requirement and ROE included in their application.
“Rate cases are a vital tool for regulators to assess company performance and to ensure that ratepayers are receiving commensurate value for investments made on their behalf,” said PURA Chairman Marissa P. Gillett. “This decision recognizes areas in which the company has made progress since its last rate case, as well as areas in which PURA expects UI’s management to enhance its efforts moving forward.”
“We have reviewed hundreds of interrogatories, listened to hours of testimony and participated in direct cross examination of the company,” said PURA Vice Chairman John W. Betkoski III. “Our goal as regulators is to ensure that utilities provide safe, reliable and affordable power to all ratepayers. UI is no exception. I would like to thank all the participants for their contribution to this decision. Many thanks also go to our dedicated PURA staff.”
“Today’s decision represents a road map by which we can all reach a place where UI and its investors are justly compensated for investments and efforts,” said PURA Commissioner Michael Caron. “Ratepayers, legislators, other parties to the proceedings, and PURA must be satisfied that customers are receiving verified value for their money.”
During the public comment period, PURA received overwhelming opposition to UI’s request for a distribution rate increase. The most common theme of those objecting to the request was that UI’s proposed increase was excessive and/or unjustified. In addition, several individuals expressed specific interest in a proposed performance-based ratemaking model, as well as support for renewable energy incentives.
The Authority conducted an extensive investigatory process over the course of 350 days involving four public comment hearings, several days of field audits and inspections, multiple rounds of pre-filed testimony, 15 days of in-person evidentiary hearings and late-filed exhibit hearings, legal briefings and reply briefs, a draft decision, exceptions to the draft decisions and oral arguments, and the issuance of hundreds of requests for further information.
UI’s last rate case was completed in 2016. UI provides electric service to over 341,000 residential, commercial, and industrial customers in 17 towns and cities in the southwestern part of Connecticut.
- Final Decision
- Decision Summary
- Frequently Asked Questions
- Regular Meeting (YouTube)
- UI Service Territory Map
- Rate Case Information