PURA approves cut to utility's request for increased revenue
Photo | Contributed
United Illuminating crews conduct storm cleanup in 2018.
The Public Utilities Regulatory Authority approved a $22.96 million increase in United Illuminating’s revenue requirement, less than 18% of the $131 million increase it requested over three years, in a final decision issued Friday.
Also, the company requested a 10.2% return on equity, which PURA lowered to 9.1%. Until certain performance issues identified by PURA are addressed, the return on equity will be 8.63%.
UI's earned ROE could exceed 9.1% depending on the company’s management and implementation of the approved rate plan, PURA said.
In July, PURA released a draft decision cutting most of UI’s requested increase.
UI filed a response in opposition to the decision, claiming it would harm the company and require an immediate write-off of $37.3 million in regulatory assets. UI asked PURA to “moderate” its decision.
UI said the revenue approved in PURA’s draft decision was “utterly insufficient” to cover operating costs, including staffing levels and capital costs, to attract needed capital to maintain its financial integrity.
The new amounts go into effect for a three-year period beginning Sept. 1.
Even though UI is receiving significantly less than requested, UI’s new annual revenue requirement of $384.87 million represents a 6.3% increase over the current level.
“Rate cases are a vital tool for regulators to assess company performance and to ensure that ratepayers are receiving commensurate value for investments made on their behalf,” said PURA Chairman Marissa P. Gillett. “This decision recognizes areas in which the company has made progress since its last rate case, as well as areas in which PURA expects UI’s management to enhance its efforts moving forward.”
UI, which provides electricity to 341,000 customers in 17 towns, is a subsidiary of Orange-based Avangrid.
AARP applauded PURA’s final decision in a statement Friday.
“The proposed increase would have been another hit to customers who are already facing soaring energy costs as well as high inflation on many necessary consumer goods, impacting the state’s most vulnerable households,” said John Erlingheuser, AARP's senior associate state director for Connecticut. “We encourage PURA to continue to thoroughly scrutinize the performance of all utilities when considering future rate increase requests.”
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