United Illuminating rate increase largely rejected

State regulators dealt United Illuminating a major blow on Friday, rejecting most of the electric utility’s $131 million proposed rate hike. Instead, customers will see a small increase.
Starting next month, the average bill will go up about $65 per year, according to the Connecticut Public Utilities Regulatory Authority. UI’s full request could have resulted in $200 more per year.
Friday’s ruling is the latest round in an increasingly nasty – and public – feud between utilities and state regulators.
UI requested an 8% increase for three years, but PURA only approved 2% for one year. In a compromise, commissioners did allow the electric provider to raise $21 million more in revenue than PURA originally proposed in June.
“Nobody's usually happy at the end of rate cases, but you usually try to come to some kind of common ground,” said Commissioner Jack Betkoski.
But common ground has been hard to find.
“United Illuminating sought a bloated, unsupported $130.7 million rate hike, padded with exorbitant guaranteed profits,” said Connecticut Attorney General William Tong. “UI never proved their case.”
The utility has fired back, sending more than 150 workers to protest outside PURA’s offices earlier this month. In a recent filing, UI warned that a rejection would be “utterly insufficient” to cover basic operating costs, including staffing and investment in critical infrastructure.
A new state law bases electric rates on how well utilities perform. It came after a public outcry over Tropical Storm Isaias, which left some customers in the dark for 10 days.
“In this state, the level of service has not been up to snuff,” said state Sen. Ryan Fazio (R-Greenwich) at a state Capitol press conference on Tuesday.
But the rules for “performance-based rates” aren't finalized yet -- and that could lead United Illuminating to take this case to court.
For now, the utility is keeping its options open.
"We are evaluating PURA’s decision,” said UI spokesperson Sarah Wall.
It’s the latest clash between utilities and PURA chair Marissa Gillett, who has aggressively taken on UI and Eversource – earning praise from customers and consumer advocates, but raising red flags with Wall Street investors.
In March, Gillett not only rejected Aquarion Water’s rate increase, but actually ordered the company to lower bills by $67 per year. Gillett’s fellow commissioners both criticized the decision, with Betkoski calling parts of it “arbitrary and capricious.”
A judge temporarily stayed the ruling.
Despite the friction, Gov. Ned Lamont re-appointed Gillett to another two-year term in June.
“She’s a disrupter,” Lamont said in June. “She’s the best person, I think, to take the lead in terms of performance-based regulation.”
Some state lawmakers think it's time for both sides to move on.
“I call on all parties to cut it out,” said state Rep. Jonathan Steinberg (D-Westport). “Just stop the sniping.”
But when it comes to the battle over electric rates, the power “lines” are already drawn.