Utilities And Isaias: Where The Proceedings Stand In Connecticut

CONNECTICUT — The aftermath of Tropical Storm Isaias is still being felt in Connecticut, 10 months after it brought heavy rain and high winds to the state and left a path of destruction with downed trees and wires and widespread multi-day power outages.

All amid the coronavirus pandemic.

As state and municipal government representatives screamed about a slow response in restoring power, utility executives said they were doing the best they could and, in the end, touted a reasonable response to the carnage the storm left behind.

State regulators then came down hard on the utilities and the process is still ongoing with impositions and appeals.

So, where does it all stand in June 2021? Patch connected with an Eversource spokeswoman to sort it all out.

Here is a summary:

Storm Investigation

On April 28, 2021, the Connecticut Public Utilities Regulatory Authority issued its final decision in the storm docket. Through notices issued by PURA, this final decision was supposed to be limited to the storm performance investigation. Once findings were made on storm performance, a second phase was to be held to evaluate the penalties (whether penalties are properly alleged, and how much the penalties would be).

Storm Penalty Proceeding

The second phase was initiated on May 5, with a Notice of Violation. In accordance with the notice, Eversource and UI filed testimony on May 26, along with a request for a hearing. The hearing for both companies was conducted on June 10. Next step is the submission of briefs, due on June 21. A final decision is due on July 14. The maximum penalty announced was $28.4 million for performance and $1.6 million on claims of reporting deficiencies.

Appeal

In the April 28 final decision, PURA assessed a penalty to utilities in the form of a reduction in the return on equity. This reduction is $31 million per year over an indefinite period. It would be a reduction to rates, which would be effective until some point in the future when PURA chooses to remove it. The move was in addition to the penalties in the Notice of Violation of $28.4 million and $1.6 million. Eversource and UI are not appealing the second phase (the Notice of Violation) in the appeal petition filed last week. The final decision is expected on on July 14 and there is no draft decision.

Return On Equity

Eversource and UI are appealing the imposition of the ROE penalty in the April 28 Final Decision. There are several different reasons for the appeal, representatives said:

• The appeal is partly based on: "No notice, evidence or process. The penalties were always supposed to be reviewed in the second proceeding. So, by moving it up and putting it in the final decision for the storm investigation, there is no process and this is an error."
• Maximum penalty: Connecticut law allows PURA to assess a maximum penalty of 2.5 percent of a utilities distribution revenues. The ROE penalty, the utilities argue, exceeds the maximum, and therefore, should not exist.