Committee seeks to switch Eversource to ‘performance based’
In a swift turnaround, a Connecticut General Assembly committee is nearing completion of an overhaul of the state’s regulation of utilities, switching to a “performance-based” model designed to limit increases in rates and force companies to be more responsive to outages.
The draft legislation comes on the heels of a 12-hour hearing in late August by the Energy and Technology Committee of the Connecticut General Assembly. Under the new rules, the Connecticut Public Utilities Regulatory Authority would be able to factor Eversource’s and Avangrid subsidiary United Illuminating’s past management of the grid into any approval of future rates, and to limit the compensation of executives if it finds utilities did not deliver on expected levels of service.
That would be a departure from the past model, which weighed most heavily on a PURA breakdown of utility requests for rates pegged to future spending needs coupled with a guaranteed rate of return for profits.
Any electric outages lasting more than two days would be a triggering event for future rate review.
The Energy and Technology Committee scheduled 75 additional witnesses during another marathon hearing on Tuesday to be webcast on Connecticut Network, including Eversource CEO Jim Judge; Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection; and Marissa Gillett, chair of the state Public Utilities Regulatory Authority.
“There are a number of different ideas suggested — some are worth considering — others are more complicated with consequences for customers that will need to be more closely examined,” stated Eversource spokesperson Al Lara in response to a Tuesday query. “We support creating a transparent, performance-based environment that’s grounded in facts, defined metrics and builds a better overall system for our customers.”
U.S. Sen. Richard Blumenthal filed written remarks with the committee, in which he reiterated his call for PURA to consider breaking up Eversource into separate businesses. In addition to its electric transmission and distribution business, Eversource sells natural gas and water through its Aquarion subsidiary based in Bridgeport, with plans to return to the electricity generation business via offshore wind farms.
“A public utility like Eversource should be truly public — putting people before profits, downsized and managed to be really responsive, and even owned by the people of Connecticut,” Blumenthal stated. “The General Assembly established the forebears of Avangrid and Eversource and what the legislature giveth, the legislature can taketh away.”
Either way, under the new law PURA would get nearly a year to wade through filings and testimony in approving rates, up from five months under the current rules that Gillett has criticized as insufficient given PURA’s staffing levels.
Alex.Soule@scni.com; 203-842-2545; @casoulman