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September 19, 2023

UI files lawsuit seeking to overturn rate decision

Contributed photo The Connecticut headquarters of United Illuminating.

United Illuminating Co. has filed a lawsuit challenging the state’s denial of most of its recent rate hike request.

The appeal was filed Monday in New Britain Superior Court. In the complaint, UI says the state Public Utilities Regulatory Authority violated state law in rejecting 87% of UI’s proposed rate increase.

UI is asking the court to reverse PURA’s decision.

In September 2022, UI requested an increase of $91 million in base revenue in the first of the next three years to cover its “prudently incurred capital investment and operating expenses” in addition to a “fair and reasonable rate of return on the capital invested.”

PURA issued a final decision in August authorizing $16.8 million of the proposed base revenue increase. 

The lawsuit says PURA’s “unlawful process” violated a state statute that requires a standard of “prudence” in ratemaking decisions, and Connecticut’s Uniform Administrative Procedure Act.

The suit also claims PURA violated UI’s constitutional right to receive “just and reasonable rates” that cover its capital costs and operating expenses, and “do not impair its financial integrity.”

UI has said that if PURA’s reduction stands, it would incur an immediate write off of $37.3 million in regulatory assets.

According to PURA’s final decision in the rate case, UI “failed to meet its evidentiary burden” to increase its rates at a time when customers were struggling to afford higher electric bills.

PURA called UI’s request to increase distribution rates by $136.5 million over the next three years “bloated” and “unsupported.”

UI is owned by Orange-based Avangrid. The company says it has invested more than $800 million in capital expenditures since 2016.

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