The arcane world of energy surcharges dominated a virtual conference call Monday, as hundreds of participants watched a public hearing between Eversource and state regulators.
At issue was a controversial rate increase implemented shortly before Tropical Storm Isaias knocked out power to hundreds of thousands of Eversource customers.
The Public Utilities Regulatory Authority (PURA) initially approved Eversource’s request for a rate hike that took effect in July. But regulators reversed course quickly after a string of complaints from some consumers about bills that went up by hundreds of dollars.
Penni Conner, a vice president at Eversource, told the hearing some rates did increase, but those price hikes got magnified by hot weather and more customers staying home this summer.
“The anger and depth of customer concern expressed this morning and throughout this ordeal is deeply troubling to me, yet understandable,” Conner said. “There is no doubt that the regular timing of the July 1 rate adjustment in the middle of [the] COVID-19 pandemic, came at the worst possible time for customers.”
Regulators spent most of the session questioning certain aspects of the rate change, which primarily centered on two delivery service rates: the “non-bypassable federally mandated congestion charge” and the “transmission adjustment clause.” Conner said those rates are tied to state policy programs and regional grid costs.
The questions were wonky, but the political statements were clear: Connecticut’s utilities need to change.
Gov. Ned Lamont told PURA members that any rate of return for utilities should be tied to performance-based metrics, like reliability and hardening of Connecticut’s grid.
“The disconnect between pay and performance is shocking to me,” Lamont said. “I’m a business guy. I’m happy to reward people for outsized performance, but I also know the importance of penalizing people for underperformance.”
More than 800,000 customers lost power after Tropical Storm Isaias, and some customers were in the dark for more than a week.
Lamont has questioned whether Eversource and United Illuminating should be assessed civil penalties for their response to Tropical Storm Isaias. A public hearing on the utilities’ storm response is scheduled for October.
U.S. Sen. Richard Blumenthal said he wants regulators to freeze recent rate hikes requested by Eversource and issue refunds to consumers.
He also suggested PURA consider “breaking up Eversource and creating a consumer-based utility, possibly with public ownership.”
“We need to think big about becoming smaller,” Blumenthal said. “This system is clearly failing men and women in Connecticut.”
