Draft legislation that would mandate public utilities pay each Connecticut customer suffering power outages under certain conditions appears to be on the fast track. But the embattled head of Eversource maintains that the cost of those penalties would ultimately be passed back to customers.
Spurred by widespread outcry after the long delays by Eversource and United Illuminating to restore power in a timely manner after Tropical Storm Isaias last month, the legislation would require the Public Utilities Regulatory Authority (PURA) to establish by Sept. 1, 2022, standards for measuring each electric distribution company’s performance of objectives “that are in the interest of ratepayers or benefit the public, which may include, but not be not limited to, safety, reliability, emergency response, cost efficiency, affordability, equity, customer satisfaction, municipal engagement, resilience and advancing he state’s environmental and policy goals.”
PURA would also be required to identify the manner, including the timeframe and extent, in which such standards and metrics would be utilized, as well as identifying specific mechanisms to align utility performance with the aforementioned metrics.
The legislation requires utilities to credit residential customers $125 a day for service outages more than 72 hours after an emergency, except for emergencies causing outages that involve more than 870,000 customers.
Utilities also would be required to provide up to $500 for any medication expiring or spoiling due to a power outage lasting at least 72 hours. Claims for losses of more than $250 must have evidence of payment.
PURA Chairman Marissa Gillett expressed full support for the measure during a hearing yesterday. In response, Eversource CEO James J. Judge said: “This cost will hit customers hard, very hard, particularly customers in need who you are thinking will benefit from these payments and penalties.”
Gillett retorted that utilities should be prevented from charging customers in order to make up the cost of the penalties.
In written testimony, Attorney General William Tong also warned that performance-based regulation (PBR) could raise rates without improving utility performance: “The success of PBR depends entirely on how it is designed and implemented. If done well, it could provide meaningful benefits to ratepayers. If done poorly, it can raise rates without improving performance.”
Tong also expressed support for reining in “excessive compensation” for utility executives. Instead of tying executive compensation limits to other states, he asked lawmakers to consider tying compensation to comparable positions in Connecticut.
Full text of his testimony can be found here.
A special legislative session later this month has been provisionally scheduled to take place later this month. Gov. Ned Lamont said during a separate press briefing that he planned to put “energy at the top of the list” for consideration.
The rate payer compensation should come out if executive salaries and bonuses. It is amazing to me that these guys have such an awful performance record and still get paid like they are doing a great job. I don’t think they know what a great job is.