Connecticututilityregulators reject nearly all of United Illuminating rate increase in draft ruling

Jul. 21—A final ruling in the rate case is scheduled to be issued on Aug. 25. Once approved, the decision will take effect in September.

PURA's decision came down hard on the electric company for failing to complete work cleaning up the contaminated English Station power plant in New Haven.

"The testimony elicited through this proceeding shows the Company's alarming disregard for the Company's commitment to remediate and maintained around English Station," the draft ruling said in part. "It has taken a lackadaisical approach to ensuring site security as shown by its failure to act to prevent (or to timely address) vandalism around the remediation site. The result is an apparent lack of ownership or accountability."

During testimony in the rate case, company officials testified the English Station clean up project has gone through six project managers in the seven years since a consent order was signed.

Sarah Wall, a UI spokeswoman, said company officials "are reviewing PURA's draft decision issued today and will file comments on Aug. 3."

The state's Consumer Counsel praised the decision, which reduced United Illuminating's request from a multi-year rate plan to just one year. This will allow for a "performance-based" evaluation before future rate plans are approved, she said.

"While my team and I are conducting a thorough review of PURA's preliminary decision, we are pleased to see clear major victories for ratepayers that will shield United Illuminating customers from paying tens of millions of dollars in unjust and unreasonable increased rates," said Consumer Counsel Claire Coleman.

"We fought hard to protect ratepayers from substantial unjustified company costs, incomplete and poorly developed plans, and proposed capital expenditures from which they receive no direct benefit, and PURA agreed with many of our key recommendations," she said. "PURA appropriately reduced UI's profits (called 'return on equity' in utility regulation) given UI's performance deficiencies. Reducing UI's profits decreases the rates customers pay for electric service. These profits have historically been inflated across the utility sector, so this appropriate reduction is an important victory for UI customers."

Connecticut Attorney General William Tong praised PURA's draft decision, saying it "sends a clear message to Connecticut's regulated utilities: Failure to meet basic obligations to ratepayers will not be rewarded."

"United Illuminating sought a bloated, unsupported $130.7 million rate hike, padded with exorbitant guaranteed profits," Tong said. "It was always on UI to justify this rate hike, and they failed to meet that standard. I thank the Public Utilities Regulatory Authority and Chairman Gillett for this comprehensive, pro-consumer decision."

Tong said he was especially please the draft decision imposes a $2 million annual penalty against UI for the company's ongoing handling of the environmental remediation at its former English Station power plant in New Haven.

"United Illuminating has utterly refused to meet its commitments to remediate English Station, which remains a contaminated blight on the residents of New Haven who were promised better," he said. "This failure will now come at a significant cost to United Illuminating's shareholders. Perhaps now United Illuminating will finally get serious about meeting their clear obligations under the law."

UI officials and the state' Department of Energy and Environmental Protection entered into a 2016 consent order in which the company agreed to spend up to $30 million cleaning up the site and have the work completed within three years of agreement being signed. Company officials testified during the rate case that they have spent $16.7 million on the clean up thus far.

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The clean up is not yet complete and in the draft decision, PURA commissioners said the English Station remediation project has been "imprudently and inefficiently managed."