Breaking up Eversource and instituting a performance-based rate of return for utilities were the two major suggestions at today’s administrative hearing hosted by the Connecticut Public Utilities Regulatory Agency (PURA), reflecting the ongoing anger over those utilities’ performance in the aftermath of Tropical Storm Isaias.
“The time for tinkering is over,” said U.S. Sen. Richard Blumenthal, the first elected official to speak during the Zoom conference. “We need to think big about being smaller, more responsible and smarter.”
Specifically, the Connecticut Democrat called for Eversource to roll back its rates to their pre-July levels ”“ the utility”™s sudden increase has been frozen by PURA ”“ and that they remain there for the foreseeable future. The senator called that rate hike “not only an insult, but an injury” to Connecticut customers, and that it is further proof of the utility”™s “abject failure.”
Blaming Eversource for the “tremendous losses” caused by its “poor performance,” Blumenthal said that “refunds and reimbursements for losses are definitely appropriate here.”
Blumenthal further asked PURA to consider breaking up Eversource in favor of a consumer-based utility that would potentially include public ownership. He said the latter has worked in Norwich, where electricity costs are 24% lower and the rate of response averages about two days, compared with the up to 10 days it took Eversource to address a significant number of outages after Isaias.
“Customers ought to be put before profits,” Blumenthal said, a sentiment shared by state Sen. Will Haskell (D-26th), whose district includes New Canaan, Westport, Bethel, Redding, Ridgefield, Weston and Wilton. Haskell said it has been obvious that Eversource has put executive compensation over its responsibility to the public. James J. Judge, Eversource”™s chairman, president and CEO, made $19.8 million last year, a 33% increase from 2018.
Judge has been absent from public view since Isaias, something that state Rep. Gail Lavielle (R-143rd), whose district includes Wilton, Norwalk and Westport, described as “shocking.”
Gov. Ned Lamont noted that the power outages affected not only homeowners but also nursing homes “on the last gasp of a generator,” as well as the state”™s water systems and seniors who rely on refrigerated medications.
“The disconnect between payment and performance is shocking to me,” Lamont said, arguing for a performance-based rate of payment. The era of “9½% rate of return for just showing up is over,” he declared.
The governor said that utilities should pay a penalty if power cannot be restored in a timely manner.
“This is not a time to just speak out and then go back to business,” Lamont said. “Let”™s not let this crisis go to waste.”
Meanwhile, in video testimony submitted to PURA today, state Attorney General William Tong called on Eversource to forgo its planned 2021 rate hike request and commit to cost-saving measures for consumers.
“People in Connecticut can”™t pay more. They just can”™t. These increases cannot stand,” Tong said in the video. “Eversource must step up and do what it can to help ratepayers and Connecticut families right now who are in such need of help and relief from their utility company. I”™m demanding today that Eversource forgo its application and that it agree right now that it will not seek rates increases next year in 2021.”
Tong noted that Eversource submits to PURA a rate petition every four years, “and without fail seeks an increase in rates.” PURA has approved a rate increase in every past Eversource proceeding, albeit lower than what the utility initially requests, the attorney general said.
PURA Chair Marissa Gillett said that the agency has received over 1,000 written comments and phone calls, and is in the process of posting them on its website. PURA will conduct public hearings via Zoom on Oct. 21-23.
The state legislature”™s Energy and Technology Committee is scheduled to hold an informational hearing Aug. 27, which is expected to include Eversource”™s Judge.
