Customers are paying less for electricity than in 2016, United Illuminating said Monday in a letter to Connecticut regulators laying out a case for an 8% increase in distribution rates over three years.
The state consumer counsel said ratepayers are already struggling to keep up with a steep inflationary spiral. UI said it, too, is confronting a 7% increase in the cost of doing business.
UI, which will submit its request in September or October, said its last distribution rate case was in 2016 when the Public Utilities Regulatory Authority approved a three-year rate plan through Dec. 31, 2019. Rates for distribution, which delivers electricity to customers’ homes and businesses, have not increased since Jan. 1, 2019, it said.
“Over this period, the company has provided its customers with great rate stability and has made significant investments in the electric distribution system that are necessary to continue to provide safe and reliable service to its customers,” it said.
By the time UI’s proposed new rates would take effect in the first of the three years beginning Sept. 1, 2023, UI will have operated for nearly five years without a distribution rate increase, “while continuing to make necessary system investments,” it said.
In addition, UI reminded regulators of an agreement in June 2021 in which UI reduced its rates to account for a lower federal corporate tax rate and agreed to return about $45 million of tax liabilities to its customers.
“Accordingly, UI customers are paying less today for distribution service than they were when rates were approved in 2016,” the utility said.
The net rate would be $90 million higher, representing an average increase of about 24.3% over current revenue from distribution and an average total bill increase across all rate classes of about 8%. However, UI’s application will include what it calls a “rate levelization proposal” — deferring a portion of the revenue increase — to spread the proposed total rate increase over the three years that would increase customer bills by about 5% a year.
UI said its rate request will include a low-income discount rate and an economic development rate to support “commercial growth” in its service area.
State Attorney General William Tong said he will “aggressively scrutinize every charge and assumption in search of savings.”
Consumer Counsel Claire Coleman said ratepayers are struggling with the highest inflation in 40 years and are paying for sharply higher electricity costs. She said she will offer an alternative to UI’s proposal.
UI said the additional revenue will help pay to improve resiliency, clean energy and grid modernization. It said it will replace aging infrastructure, improve performance during routine service and emergency restoration, put in place advanced vegetation management and adopt new technologies.
UI serves 341,000 residential, commercial and industrial customers in the Bridgeport and New Haven areas.
Stephen Singer can be reached at firstname.lastname@example.org.