Keeping the power on, the water running and rates affordable are among the many goals of the Public Utilities Regulatory Authority (PURA).
How they do that is about to change somewhat, thanks to Governor Lamont, but how much change is coming to the board is still to be decided.
NBC Connecticut's Mike Hydeck spoke with Sen. Norm Needleman (D-Essex), the chair of the Energy and Technology Committee, about the changes.
Mike Hydeck: Let's start out with rates. As of July, power rates are expected to go down. Remind us, why will there be a rate reduction?
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Norm Needleman: So rates adjust for standard service electric rates every six months, January 1, July 1. There was a very significant spike on January 1, largely brought out by the war in Ukraine and the United States' desire to supply natural gas overseas. So there was a real spike in the cost of natural gas. Markets have settled down since then. And rates for the summer will be substantially lower; a little bit higher than last summer, but substantially lower than they were for the first six months of the year.
Mike Hydeck: So moving forward, the governor wants to change the way utilities are awarded their increases. Perform well, get paid. Take a long time to get the power back on after the storm, it would be a different story. Is that right? And where are we with that?
Norm Needleman: So when we did Take Back Our Grid after Hurricane Isaias, we we did something in that bill called performance-based ratemaking. And that is exactly what it sounds like. You get rewarded more with higher returns on equity if you perform well. You get penalized if you don't. And Senate Bill 7 this year, a very, very large regulatory bill, we added some enhancements to that we increased the scope of it to natural gas companies and to water companies. And we also in Take Back Our Grid allowed for low income rates and we've now expanded that to gas and water also.
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Mike Hydeck: So who will decide the benchmarks for what's a good response after an outage? And when will that be actually implemented, do you think?
Norm Needleman: So that's currently being done by PURA, we're just giving them more tools in their tool basket. You might remember that after Isaias, both electric distribution companies were penalized quite substantially for failure to perform adequately. I think penalties to Eversource were substantially higher. In the case of Eversource, that resulted in a negotiated settlement with the governor, Attorney General and DEEP. That settlement was voted on by the PURA board not unanimously, but accepted, because it was a majority rule. And the penalties sort of stood that there were several hundred million dollars in penalties that Eversource paid. I think UI is appealing right now, but that's in the hands of the courts.
Mike Hydeck: Alright, so you lead me to my next question. Eversource and to a lesser degree, United Illuminating, haven't been in front of the board to show their financials in years because of those negotiated settlements. When there was an issue with power, they came up with a blanket system. And they didn't get a chance to show their financials. That's something the PURA chair would really like to see, Marissa Gillett. Will that actually change now moving forward? Will they be coming forward for rate cases on a certain, like every five years or so?
Norm Needleman: Yes. Well, let me just say that there is an ongoing rate case right now with United Illuminating. I think that there will be an draft decision rendered sometime this summer. It goes final in the fall, I believe. Eversource is locked out of a rate case, I think until next year sometime. Based on the settlement language, nothing we've done obviates that. But yeah, I think that there's been a desire on the part of the leadership of the Energy and Technology Committee as well as on the part of PURA to make sure that we see clearly what their books look like. And the longer you go through without having a full rate case, the harder it is to look at that because you have more and more to unpack. So I'm excited that this bill, Governor has not signed it yet, but it's been transmitted to him. This bill does significantly enhance what we did in Take Back Our Grid in terms of the tools and the guardrails that they work under, to do this analysis.
Mike Hydeck: And you know that when they asked for a rate increase, and they said they really needed money, and then a week later they came out and bragged to stockholders how well they were doing made a lot of people upset. So moving forward, the Public Utilities Regulatory board, let's talk about that for a sec. I got about a minute or so left. Two of the members, Mr. Betkoski and Mr. Caron, their terms have expired. There's only three people including the chair. What do you see happening here? Do you think they will be reappointed by the governor? Will there be more seats on the board? What do you feel like moving forward with the PURA board?
Norm Needleman: Well, for the last four years, the board has been authorized to be up to five members. The governor has never availed himself of that. As you say, Chair Gillett's term expires next January. Commissioner Betkowski and Caron, their terms have expired. I don't mind the executive branch, my goal, in whatever bills I've done is to make sure that we have three, four or five working commissioners who put in the time and effort. They're all relatively highly compensated for public officials. And I think the public has the right to expect that they'd be present and participate in all dockets in all cases, all the time. And I can honestly say, I don't think that that's the case right now.
Mike Hydeck: Best case scenario, five people on that board, if you had your druthers?
Norm Needleman: If I had my druthers, it would be three. But I'm not the governor. But again, I would want three working commissioners who put in the time and effort. That said, the governor has the choice to make whether it stays at three or goes to five, whether he reappoints the two that are there. Two new members, it's really up to him. The other thing I should say is until now, the board picks its own chair, right now. We get granted in Senate Bill 7 the authority for the governor to appoint the chair from the seated members. It never made a lot of sense to me that the members pick their own leader. The governor should pick the chair.
