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March 21, 2024

United Illuminating seeks new revenue source for EV charging station program after PURA’s denial

United Illuminating CEO Frank Reynolds
By Andrew Larson

In the ongoing regulatory battle between United Illuminating (UI) and the Public Utilities Regulatory Authority (PURA), UI is asking PURA to approve a revenue stream for its electric vehicle charging program, which was rejected in a recent rate case.

In a "motion for modification of EV funding mechanism" filed March 18, UI said the regulatory agency’s August 2023 rate decision, which reduced its proposed rate increase, has left funding for its core programs in jeopardy.

The company’s financial difficulties could threaten the continued support of UI’s EV program, according to the filing.

On Aug. 25, PURA rejected UI's proposed distribution rate increase of $131 million over three years and approved a $23 million increase instead.

As part of the case, UI sought to recover millions of dollars in costs to install 900 electric vehicle charging stations, which UI said would help the state meet its clean-energy goals.

PURA disallowed cost recovery for the program, noting in its decision that “the capital expenses sought for recovery have not yet occurred.”

In the new filing, UI is seeking "authorization to defer all EV-related program costs for recovery on a contemporaneous basis through the annual revenue adjustment mechanism."

That means UI would record all costs, as incurred, to a deferral account. Each year, it could recover the deferred EV costs through the annual Revenue Adjustment Mechanism (RAM), which is filed every year to be reconciled beginning May 1.

If approved, this would allow UI to have a revenue stream that roughly matches the costs it is incurring for the program, with an approximately one-year lag between when the money is spent and costs are recovered.

UI’s effort to secure funding for its EV program comes at a time when the state is working to shore up its EV infrastructure ahead of its 2040 zero-carbon mandate.

Last year, a proposed regulation that set a 2035 deadline for ending sales of new gas-powered vehicles in Connecticut failed after a push by Republican lawmakers to scuttle the mandated shift to EVs.

This legislative session, Gov. Ned Lamont has reiterated that he wants the legislature to do more to support electric vehicle infrastructure.

“Monday’s filing reflects UI’s strong commitment to advancing the clean energy transition by expanding access to electric vehicles for our customers,” said Sarah Wall Fliotsos, a spokesperson for UI. “The filing proactively requests that PURA move EV incentive programs from rate case proceedings to the annual Revenue Adjustment Mechanism (RAM), which funds every other clean energy program that state policymakers require us to implement. Funding EV incentives through the RAM will provide the regulatory certainty these important programs need, and we urge PURA and policymakers to take urgent action to correct this oversight and protect their long-term viability.” 

In Connecticut, UI provides electricity to about 342,928 customers in the Greater New Haven and Bridgeport areas.

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