The Connecticut Public Utilities Regulatory Authority (PURA) has formally rejected United Illuminating’s (UI) proposed distribution rate increase of $131 million over three years and authorized 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.
PURA also approved an annual revenue requirement for UI in the amount of $384.865 million for the rate year starting on Sept. 1. 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 determined that an allowed return on equity (ROE) of 9.10% is appropriate, but it reduced 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. PURA said UI failed to justify 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.”
Connecticut Attorney General William Tong praised the decision, stating that PURA “was right to see through the company”™s attempts to distract from the sound reasoning of the decision and to rely on the clear record in this proceeding””United Illuminating sought a bloated, unsupported $130.7 million rate hike, padded with exorbitant guaranteed profits. UI never proved their case.”
Bridgeport Mayor Joe Ganim issued a statement praising PURA”™s decision by stating the ruling “helps to alleviate families and households in Bridgeport that have been distressed by recent rate increases on electricity. Ratepayers in Bridgeport have had to manage the financial strain of paying a substantial amount for electricity rates that are excessive for the average household in our city. I am thankful that this will leave our residents with a peace of mind, knowing that rates will not remain at a dramatic increase and will no longer act as a large burden within Bridgeport.”
Also joining the praise for PURA was AARP Connecticut Senior Associate State Director John Erlingheuser, who said, “The proposed increase would have been another hit to customers who are already facing soaring energy costs as well as high inflation on many necessary consumer goods, impacting the state”™s most vulnerable households. We encourage PURA to continue to thoroughly scrutinize the performance of all utilities when considering future rate increase requests.”
