April 19, 2018

Regulator cuts Eversource rate request by more than half to $124.7M

Contributed photo
Contributed photo
An Eversource crew.

State regulators on Wednesday gave final approval to an Eversource rate increase that will amount to $124.7 million in additional revenue for the utility company between 2018 and 2020.

As a result of the decision, the average Connecticut residential customer will see a $5.40 increase in their monthly bill, followed by smaller increases in the following two years, according to the Public Utilities Regulatory Authority (PURA).

The Hartford- and Boston-based utilities provider had originally asked for a nearly $337 million rate increase when it applied to PURA in November.

The company said it needed the increase to the make up for capital expenditures on its distribution system, higher taxes and depreciation expenses, and a decline in electricity sales and demand.

But a settlement agreement between Eversource and PURA in January slashed a sizable portion from the initial ask by reducing revenue requirements related to depreciation expense, return on equity and other factors.

Last year's federal tax cuts also lowered the overall cost to taxpayers over the three-year increase, knocking about $55 million off of the original $337 million, according to the Office of Consumer Counsel, which negotiated the January settlement and was involved in the rate case.

If Eversource's original request was approved, the average customer would have seen a $13.70 monthly increase in the first year, according to PURA.

"The decision today sets revenue levels that are just and reasonable, and will allow Eversource to attract capital needed for infrastructure investment necessary to provide safe, adequate and reliable electric distribution service at reasonable rates for its 1.2 million Connecticut customers," PURA Chair Katie Dykes said in a statement. "Eversource has committed to significant capital improvements to upgrade its distribution system and continue to modernize its systems, processes and workforce."

Acadia praises lower fixed charge

On Thursday, the nonprofit Acadia Center said the final decision was a win for both consumers and clean energy.

PURA approved a fixed customer charge of $9.50, down from $19.25, which adheres to a law passed by state lawmakers in 2015.

High fixed charges burden seniors and low-income customers and reduce customers' incentives to conserve electricity, Acadia said.

"Consumers everywhere prefer choice and control, and this lower monthly fixed charge will give customers substantially more control over their electric bills," Bill Dornbos, Acadia Center's advocacy director, said in a statement. "The new rate design will also help promote energy efficiency and renewable energy, more closely aligning Connecticut's electricity rates with its energy policy goals."

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