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May 3, 2024

After Eversource threat, Lamont backs PURA chair for another term

Steve Laschever Public Utilities Regulatory Authority Chairwoman Marissa Gillett was accused in a lawsuit Thursday of overstepping her authority in hundreds of cases involving the state's two largest utilities, United Illuminating and Eversource.
By Mark Pazniokas, CT Mirror

The day began with Eversource’s chief executive condemning the leadership of the Public Utilities Regulatory Authority under Marissa P. Gillett. It ended with Gov. Ned Lamont giving her a vote of confidence and four years of job security.

Lamont’s commitment Thursday came eight hours after Eversource’s president and chief executive, Joseph R. Nolan, told analysts on an earnings call the company will cut spending on capital projects by $500 million over the next five years.

Nolan said the regulatory environment in Connecticut was hostile to investment, a statement interpreted at the state Capitol as an effort to nudge Lamont to jettison an adversarial PURA chair.

If so, it backfired.

In a brief interview Thursday, Lamont cut off questioning about the status of Gillett, whose term expired on March 1. He said flatly, “I’m reappointing Marissa.”

Lamont had expressed support for Gillett, especially when discussing what he saw as the desire of Eversource and Avangrid leaders to see new leadership at the authority. But he typically left wiggle room.

“It’s been generally clear,” Lamont said. “Now, it’s crystal clear.”

That clarity does not extend to Gillett’s longer-serving colleagues, John W. Betkoski III and Michael A. Caron, both former members of the state House of Representatives. 

Their terms expired before Gillett’s, and Lamont made no similar commitment. He offered a contradictory take on keeping or replacing them.

“I don’t anticipate making any changes, but I do think change on a regular basis is a good thing,” Lamont said. “Let me leave it at that.”

Rep. Jonathan Steinberg of Westport and Sen. Norm Needleman of Essex, the Democratic co-chairs of the legislature’s Energy and Technology Committee, had urged him to act after the Eversource earnings call.

“He should make a decision on all three existing commissioners, but most importantly, the chair,” Steinberg said. “Under the current circumstances, my perception is the utilities are still betting they can get rid of her. And until that becomes a non-issue, we will have uncertainty, and we will have lack of progress on many critical infrastructure projects, because they are effectively ceasing to do their job.”

They applauded the governor’s decision, unsurprising given their support for Gillett in her differences with the utilities, as well as Betkoski and Caron. A law they authored a year ago stripped the ability of the other two authority members to name a new chair. It gave the responsibility to Gov. Ned Lamont, whose administration recruited Gillett.

Sen. John Fonfara, D-Hartford, a former energy committee co-chair, voted for the bill but complained it was written to address personality conflicts.

“It’s a dangerous road to go down. No law should be written for a personality, for a person,” Fonfara said. 

Connecticut is at a critical phase in the gradual shift mandated by the General Assembly and Lamont to performance-based regulation, modifying the century-old approach of allowing utilities to recover their cost of service and earn a reasonable return on capital investments.

By late August, PURA aims to have finalized the standards, rewards and penalties under performance-based regulation. For the two electric utilities, Eversource and Avangrid, the system will base compensation, at least in part, on how well they do in keeping the lights on, not just on how much they spend.

Nolan said his company has invested heavily in making the grid more resistant to storms, but it was likely to cut capital spending on projects related to reliability by $100 million a year.

Eversource complains that the Public Utilities Regulatory Authority has been slow to approve the recovery of $635 million in storm costs incurred from 2018 through 2021, as well as $400 million in uncollected bills from ratepayers. It also is asking the Supreme Court to review a rate cut imposed on its water subsidiary, Aquarion.

The Aquarion rate case was the first under Gillett. The decision was largely upheld on an initial appeal to a Superior Court judge, ratifying the authority’s shift under Gillett toward stricter standards for which expenses can be recovered from utility customers.

“We are requesting that the Connecticut Supreme Court hear this case due to the critical legal issues raised by the Aquarion rate decision,” John M. Moreira, the Eversource chief financial officer, said on the earnings call. “Without proper resolution of these issues, there will be a negative impact on utility investment and customers long-term.”

Neither Eversource nor Avangrid, the owner of United Illuminating, had publicly asked Lamont to fire Gillett. But the governor, who has periodically taken calls from chief executives of the two companies, said their desires were made clear to him.

Needleman said both utilities had waged an extraordinary campaign. He said, “There’s a lot of horsepower at play in trying to get that one person not reappointed by the governor.”

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