Two days after Tropical Storm Isaias roared through Connecticut, leaving hundreds of thousands of customers without power, the chairman of the Public Utilities Regulatory Authority for Connecticut (PURA), spoke with chief investigative reporter Len Besthoff about the situation, and her plans to modernize our state’s electric utilities.
NBC Connecticut's Len Besthoff: Tell us why you are doing this investigation.
Marissa Gillett, PURA: I think two days in, I have seen enough. As you noted just a second ago, the response and the preparation in advance of the tropical storm is wholly inadequate. Especially from Eversource. And what we’re seeing so far in terms of the transparency and communications between the utilities and their affected customers is just unacceptable. And while the focus needs to remain right now on restoration and life safety issues, I’m putting them on notice that we’re watching them and we’re watching carefully. And they should expect to be held accountable for any missteps that we find out afterward.
Len Besthoff: I noticed in the release you said the time for excuses is over here. What do you mean by that?
Marissa Gilett: What I mean is, I am about 15 months into my tenure having been recruited to head PURA by the governor. I came up from Maryland with my family last year. Over the past 15 months I’ve seen a lot of presentations from both utilities about the investments that have been made, in response to the 2011 storms. And I understand that, their line is going to be this could have been worse if we hadn’t been investing in the system since then, and what I have to say back to that is, I don’t know how this could have been much worse. So we intend to do a full investigation and make sure that the ratepayers, if they haven’t received a return on the investment since 2011, that we’re gonna hold the utilities accountable for that. I’m just not here for the excuses. I just find that unacceptable.
Len Besthoff: currently the numbers are, that we’re I believe third in the country for our electric rates. So, shouldn’t there be an expectation, that with that we’re going to have a really hard physical plant here?
Marissa Gillett: I’d say absolutely. The expectation for the return on investment and hardening the grid and other activities. Ratepayers have a right to be mad. They’ve put in hundreds of millions of dollars into this system. The governor recruited me here to work on a grid modernization plan, for both utilities, which, has been underway since last October. So just on July 31st, we received proposals from third parties, because we are, we’re looking beyond the utilities at this point for a way to modernize our grid. And if we’re gonna continue to pay the price per kilowatt-hour that ratepayers in this state pay, they better well be getting value for that money. I think that’s what ratepayers can expect moving forward, from me and from PURA.
Len Besthoff: So tell us specifically, where you think Eversource and UI have fallen down in this process, and and clearly, it’s something different than what you’ve seen and experienced in other states.
Marissa Gillett: It is. So I come from Maryland, where we had our own version of the 2011 storms that were experienced here. And in response, to the 2011 storms that we saw in Maryland, our utilities stood up. Grid modernization efforts that included statewide deployment of advanced metering infrastructure, that helps provide real-time data, not just on usage, but on outage spots, and nested outages, which is incredibly important in widespread outage situations like this. And they held themselves accountable to reliability metrics that were established in conjunction with the Maryland Commission version of PURA in Maryland. And then took, we put together penalties and binding estimates for the capital expenditures that they invested in that system. And that’s what I’ve been evaluating, over the past, the past, little over a year. We’ve had solutions days and put out RFPs and request for program designs, that try to get our electric system in Connecticut set up to accommodate the level of modern infrastructure that should already be here, based on the amount of money that’s been invested. That’s my frank assessment at this point.
Len Besthoff: In terms of the response to this storm, where is it that you think UI and Eversource have really fallen down here and what has precipitated you guys now saying, ‘we got to investigate this immediately’?
Marissa Gillett: PURA is a quasi-judicial agency so we are required to give both utilities due process. And let them present evidence of why they feel their response and preparations were appropriate. But at this point I’ve seen enough from both utilities that indicate that there’s reason to believe that it hasn’t been enough. Specifically in the pre-staging of crews, Eversource fell down on that one dramatically, undervaluing, underestimating the number of crews they needed to pre-stage for this event. There have also been a number of communication errors not just between the utilities and elected officials, but also between the utilities and their customers. The folks that pay their bills on time, and deserve insight and transparency into what’s going on, and that lack of communication I think frustrates customers probably even more than the lack of power, just the simple act of not knowing what’s going on or when you can expect to be restored. I’m looking forward to hearing the utilities out on why their responses and preparation were acceptable. But I think that there’s gonna be a strong counterparty in this case, in the form of the Connecticut public, that is gonna have a different opinion.
Len Besthoff: You dial back a week, and Eversource is defending these very robust rate increases that people are paying, saying this is how we have reliable power, and a stronger, more hardened physical plant. Then here we are a week later, and it seems like it’s just chaos.
Marissa Gillett: I’d have to say that the timing, it’s not a good look. For either utility. We must be careful because the rate increases, last week are also under investigation by PURA. I’ve heard everything that the utilities have said, and that the legislature has weighed in on, and that is gonna be a set of very enlightening investigations back to back on the rate increases and then on the response and preparation. Again, if the ratepayers are not getting a return on their investment to deliver that power, the utilities are gonna have to be held accountable. They’re in the business of providing reliable power and I just don’t see how that’s happened over this past week.
Len Besthoff: Am I right in the assessment that I’ve been hearing that the ROE (return on equity) for Eversource and for UI that’s permitted by PURA are some of the highest roe’s in the country? Is that right?
Marissa Gillett: So I have to tell you there has not been a rate case since I took over as chair, so I can’t comment why they’re set at the level they’re set at, but I think the statement that you just made about them being the highest in, among the highest in the country is not far off. And that, that’s gonna be a focal point of the investigation that PURA does. And whether the risk that has been shifted to ratepayers, for that investment bears out the utilities receiving that level of return. A lot has been said over the past ten days about PURA and that role that PURA plays in regulating these utilities. I’m sure many ratepayers in Connecticut did not even know PURA existed before last Saturday. So I want to assure folks that even though PURA has been quiet in light of the rate hikes last week, that’s out of a concern that I don’t have to recuse myself from the investigations. Because my role as a commissioner is acting as a judge over this so, I want to emphasize to folks that I know these problems exist, that’s exactly why the governor recruited me up here last year to deal with this, and before my term is up in 2024 I hope ratepayers will remember that in 2024 and hold me accountable. Because this is just not acceptable and I think people will see that I don’t find it acceptable.