CT Attorney General Files Formal Opposition To Potential UI 'Infrastructure' Rate Hike

CONNECTICUT — Connecticut Attorney General William Tong Monday filed a brief with the Public Utilities Regulatory Authority urging "the full rejection" of United Illuminating's latest $105 million "rate hike demand."

The utility in September company filed its intent to seek the $105 million in its reliability investment plan to "support 200 major infrastructure projects." The impact, a UI spokeswoman told Patch Tuesday morning, would push bills up $25 to $30 monthly on average.

UI's service territory includes 17 municipalities in Connecticut in an area totaling 335 square miles along or near the shoreline.

The timing of Tong's announcement — released at dinnertime Monday — came at the deadline for those with intervener status to file briefs to PURA and just hours after Governor Ned Lamont announced that he is selecting Commissioner Marissa Paslick Gillett to serve another two-year term to chair PURA. Gillett has served on PURA since 2019.

Said Tong, "This revenue demand was a bad faith maneuver from the jump, and an insult to the many Connecticut families and businesses who can barely afford to keep their lights on right now. This whole thing dates back to 2022, when the company sought a bloated $130.7 million increase padded with unsupported expenses and exorbitant corporate profits. It was their job to prove their case, and they could not. We reviewed every penny of that application, and fought hard for savings for Connecticut families and businesses. When United Illuminating didn’t get the rate hike they wanted, they appealed unsuccessfully in court, and have filed two subsequent applications for new rate hikes. Once again, they can’t prove their case. They cannot explain why they should earn a higher return on equity than any other utility. And they cannot show what they are doing to honor their obligations to clean up English Station in New Haven. There is zero justification for this massive rate hike, and PURA should reject it in its entirety."

Click here for Tong’s brief, which "addresses the company’s unsupported return on equity demand, the lack of substantive progress on remediation at English Station, among other costs that do not serve ratepayer needs or interests."

Tong is being assisted in the matter by Assistant Attorneys General John Wright and Caroline McCormack, and legal intern Aurea Orencia, under the supervision of Michael Wertheimer, Chief of the Consumer Protection Section.

UI is a subsidiary of Avingrid. The utility respoonded.

"The purpose of UI's rate request is to support critical investment in energy infrastructure that serves 345,000 homes and businesses across south-central Connecticut every day. The Attorney General's statement demonstrates a misunderstanding of how utility companies invest in the energy system for the benefit of customers and further reinforces Connecticut’s reputation for having the worst regulatory environment in the United States. His supposed concern over the impact of electricity costs on his constituents is belied by his failure to advocate against undergrounding a 7-mile transmission project in Fairfield and Bridgeport, which would add $500 million to Connecticut electric rates — far more than UI's essential investment plan," said Sarah Wall Fliotsos, a UI spokesperson.

Fliotsos Tuesday reiterated the utility's September statement that several capital endeavors have been ongoing, yet "not paid for," including $41 million "for projects that are already serving customers with reliable, resilient electric service but whose costs have not been included in rates."

In his brief, Tong said. "UI has failed to meet its evidentiary burden for a distribution rate increase, and the rates UI proposes are grossly unaffordable to its customers."

In September, UI officials said the request "is due to PURA’s deferral of cost recovery in 2023."

UI's request is based on more than 200 "major infrastructure investments" that include:

• Rebuilding Old Town Substation, a 1960s-era substation in need of technological modernization that serves nearly 18,000 distribution customers, primarily in Bridgeport and southern Trumbull.
• Replacing century-old splice chambers in New Haven, Bridgeport, and Ansonia, which will "ensure the reliability of the underground electric network for critical infrastructure located in urban and downtown areas."
• Funding the decommissioning of the Whitney Avenue substation, which was a 70-year-old substation serving 2,000 customers in New Haven and Hamden, "to ensure customers are instead served with modern, advanced infrastructure. "

UI also stated, "Additional investments will enable the clean energy transition, such as battery storage projects in New Haven and Bridgeport; provide UI customers with new innovations to improve their customer service experience, such as generative AI on the company’s website and improvements to Interactive Voice Response technology on UI's call-in system; and ensure our front-line workforce is well-trained and fully staffed, with investments in recruiting the next generation of our front-line workforce, many of whom live in Environmental Justice communities, to mitigate attrition due to retirements. Furthermore, many of the investments will allow UI to partner with municipalities on economic development priorities, such as serving additional load to support redevelopment of the New Haven Coliseum site and building out the infrastructure needed in the residential and retail development planned at Steelpointe Harbor in Bridgeport."

The utiliuty added, "UI's one-year rate proposal is approximately representative of the differential between UI’s previous rate request in 2022 ($131 million in a three-year rate plan) and the increase PURA approved in August 2023 (less than $23 million in a one-year rate plan). While spreading the necessary rate increase over three years would have resulted in a steady annual rise of 5 percent and provided rate stability for customers, PURA’s choice to defer the necessary funding has led to UI’s request for a one-time increase of 9 to 10 percent in overall revenues in a one-year plan beginning in late 2025."

Said Tong in his brief, "The Attorney General respectfully urges the Public Utilities Regulatory Authority to reject UI’s rate hike request in its entirety as unjustified and unwarranted, resulting in rates that are higher than just and reasonable levels."

He continued, "The Attorney General has identified a number of adjustments to the Company’s cost of capital and has documented multiple unnecessary expense items that the Authority should disallow. These adjustments – together with those identified by the Office of Consumer Counsel and other parties - would reduce UI’s proposed revenue requirement by tens of millions of dollars per year."