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PURA Preliminary Ruling Slashes UI’s Electric Distribution Rate Request

November 29, 2016 By Cheryl Kaften

Connecticut’s Public Utilities Regulatory Authority (PURA) released a proposed final decision on November 23 (Docket No. 16-06-04) – trimming about $41 million from the amount that United Illuminating had sought to increase electric distribution rates to all classes of customers.

UI serves 330,000 residential, commercial, and industrial customers in 17 towns and cities in the greater New Haven and Bridgeport areas.

By application dated July 1, UI had requested a rate increase of nearly $100 million to address predicted “operating deficiencies” of approximately $66 million in 2017, $20 million in 2018, and $12 million in 2019.

If that filing had been approved, the average residential customer would have seen a $9.34 monthly increase in year one, a $9.50 monthly increase in year two, and an $11 monthly increase in year three.

UI also requested an increase in its return on equity (ROE) from 9.15 percent to 9.92 percent; and proposed a new rate design that included an earnings sharing mechanism and continuation of a revenue decoupling mechanism (Under revenue decoupling, a utility adjusts bills to customers, based on how actual revenue compares to budgeted revenue. Any excess revenue is refunded to customers as a credit adjustment. If revenue falls short, the utility charges enough to ensure that funds are available to continue to deliver reliable service.)

United Illuminating last filed a rate request in February 2013 and is still operating under that rate plan.

Under PURA’s proposed final decision, the utility would receive a revenue increase of approximately $41 million in 2017; and increases of roughly $14.4 million in 2018 and $3.4 million in 2019.

The proposed final ruling also would hold the company’s ROE at the present rate of 9.15 percent, as the commission “found it to be fair and reasonable, and sufficient for UI to fund capital improvements to upgrade its distribution system and continue to modernize its systems, processes and workforce.”

PURA estimated that the overall rate impact of on a customer using 500 kilowatt-hours (kWh) of electricity would be between 2.1 percent and 2.7 percent, beginning in January.

Parties to the proceeding have until Friday, December 2, to submit written exceptions to PURA’s proposed final decision. Oral arguments are scheduled for December 8, with a final decision scheduled to be rendered by PURA on December 14.

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