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January 23, 2024

Weary of conflict, Lamont demands more collegial tone at PURA

Marissa Gillett

Gov. Ned Lamont summoned the commissioners of the Public Utilities Regulatory Authority to his office last week for an unusual meeting in which he demanded they set aside policy differences and work together on performance-based regulation, grid modernization and other substantive issues.

The private conversation came at a time when Lamont, the sole appointing authority for PURA, has maximum influence over the quasi-judicial agency: All three commissioners are either up for reappointment or will be shortly, and Lamont also has statutory authority to expand membership from three to five members.

In an interview Monday, Lamont said he was postponing his tentative plans to change the dynamic at PURA by adding two new commissioners. Instead, Lamont said, he intends to closely monitor the authority before deciding whether it requires an overhaul.

“We’ll see in three months, six months. I hope it’s working,” Lamont said.

Are the PURA commissioners effectively on probation?

“You said that, not me,” Lamont said.

He reiterated his support for Marissa P. Gillett, the regulatory lawyer he installed as chair nearly five years ago, and her policy priority — a shift to a rate structure that gives regulators the ability to reward or penalize utilities based on performance, as opposed to pegging rates to cost of service and a reasonable return on capital.

But the governor hinted he is wearying of the clashes between Gillett and her two long-serving colleagues, John W. Betkoski III and Michael Caron, and the open hostility between PURA and the state’s two dominant regulated utilities, Eversource Energy and Avangrid.

“Marissa has some of the best analytic skills in the industry, really good, and really heading in the right direction. And if she can just work with Mike and Jack, that’s a good team,” Lamont said. He summarized his message to them in two words: “Work together.”

A month ago, Lamont said he was leaning towards expanding PURA to five members, and he had begun interviewing potential nominees with an eye to expanding the expertise of the authority’s commissioners. As recently as two weeks ago, that still seemed to be the plan.

His change of heart comes after Gillett all but called for Betkoski and Caron, both former lawmakers, to step down, suggesting it was time for “fresh faces” after 26 years on the job for Betkoski and 11 for Caron. 

In an interview with the energy podcast Volts, posted on Jan. 10, Gillett said, “There’s a real risk of becoming too cozy or not having fresh ideas the longer you stay in any position.” 

Lamont said Monday that he was pleased to learn the trio dined together that same week to clear the air.

“They were making sure if there are any misunderstandings, they’re in the past,” Lamont said. “They’re doing too many incredibly important things, starting with performance based [regulation], smart meters, not just rates.”

“Smart meters” is a colloquial synonym for advanced metering infrastructure, or AMI. Among other things, AMI gives utilities the ability to charge different rates for off-peak electric consumption. 

United Illuminating, a subsidiary of Avangrid with a 17-community service area anchored by Bridgeport and New Haven, has installed smart meters, but AMI is a point of contention between PURA and Eversource, which controls the distribution of electricity in most of Connecticut.

PURA has had an open docket on AMI since 2019, and the authority issued a unanimous decision on Jan. 3 that outlines a path forward for implementation of AMI, while putting off the question of how Eversource would recover infrastructure costs it estimates at $700 million over five years.

“The Authority considered potential cost recovery methodologies for both Eversource and UI and finds it necessary to conduct a contested proceeding to consider the establishment of a rate reconciling mechanism for Eversource’s AMI investment,” PURA said in the decision.

Last week, Eversource asked PURA to reconsider and warned that no large-scale investment would come without clarity about recovering costs in its rates.

“At this point, Eversource investors are unwilling to support any incremental or large-scale investment on the Connecticut distribution system where this type of regulatory risk exists,” the company said in its motion.

Eversource and Avangrid have complained to Lamont that PURA’s approach to rate-setting under Gillett has made it difficult to make investments in the grid. By her own description, she has been “adversarial.”

Lamont said he reiterated in his meeting that he wants an open line of communication between the regulators and the regulated.

“Just take care of business. You are the judge, not the prosecutor. Work together,” Lamont said. “Sometimes that even means a couple of meetings with utilities. I’ve got no problem with off-the-record meetings.”

Gillett could not be reached for comment. In separate interviews, Caron and Betkoski said the governor was direct in his expectations.

“The governor made it very clear. He expects us to work together,” Caron said. “He wants us to try and work with the companies, as well as all the other stakeholders, and make sure that we come up with an equitable modern grid and performance-based regulation that is effective and not the least of which is a rollout of the advanced metering infrastructure.”

“I think the governor made it clear that we’re a very important agency. It’s a time that we’re dealing with things like performance based regulation, AMI, and we need to be collegial and work together,” Betkoski said. “That was the message that I heard loud and clear from the governor.”

Lamont said he sees signs of progress, but he will be watching and waiting before submitting any names for a new term on PURA.

“I’m not gonna wait for too long,” he said.

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