Conn. gubernatorial candidates react to Eversource's double-digit rate request
Eversource’s request for a 11% hike in electricity rates likely solidifies energy prices as a key issue in the race for governor.
Gov. Ned Lamont (D-Connecticut) and challengers from both parties said they would hold Eversource accountable and stand up for ratepayers.
Eversource filed a letter of intent on Wednesday, indicating the utility will formally file and open a rate review case, likely in mid-July.
At that time, the company said it was seeking an 11% increase in its delivery charge to cover operating expenses.
Eversource said in its letter that it incurred a $503 million operating deficit. If approved, the rate increase would take effect in 2027.
Lamont responded with a “message to Connecticut families” questioning the need for the increase.
He noted that the company made a $1.69 billion profit last year, while CEO Joseph Nolan received $13.5 million in total compensation. Lamont vowed in the letter that the Public Utilities Regulatory Authority (PURA) will review the increase thoroughly to ensure customers don’t pay more than necessary.
Lamont, who appoints all five members of PURA, also told reporters that recent changes allow PURA to prevent increases for things that don’t directly benefit ratepayers.
“You know we had to change the rules a few years ago,” he said. “They had charitable donations, they put in the rate base, lobbying, and advertising fees. We’re trying to make sure our ratepayers only pay for electricity.”
Rep. Josh Elliott (D-Hamden), who is challenging Lamont for the primary, said the state should help municipalities purchase and deliver their own electricity. A handful of cities and towns already do this.
Elliott said this likely includes using eminent domain so cities and towns can utilize existing infrastructure and state aid to help municipalities start up local utilities.
“You allow people who live in the municipalities to decide for themselves whether or not they want their energy to be delivered publicly or privately,” he said.
Sen. Ryan Fazio (R-Greenwich), the Republican nominee, said Lamont hasn’t been tough enough on utilities.
Eversource’s last rate review case was settled in 2018. Fazio thinks the state should require utilities to conduct formal rate reviews more frequently to bolster transparency and reduce the need for such large requests.
“Unfortunately, when the governor has had leverage over the electric utilities, including with the sale of Aquarion, in the previous settlement that should have been a rate case, he hasn’t applied it,” Fazio said.
Eversource issued the following statement in response to the reaction from lawmakers in Connecticut:
“We recognize that this is an election year, however, our customers deserve better. Constant attempts to politicize energy policy and trade on charged rhetoric around electric rates do not serve the interests of customers, nor does it do anything to solve the pressing energy issues facing our state and region. As we’ve stated, there are no CEO, CFO or company president salaries or other pay that will be included in our rate request, and the vast majority of the “headline” compensation that politicians continue to sensationalize is not in customer rates at all. Even if our CEO and other executives worked for free, customer bills would be the same and energy affordability would still be a prevalent conversation in New England as energy supply constraints continue to drive the largest and most volatile part of customer electric bills.
The fact is that electric power is needed for public safety, economic security, education and the health and well-being of our customers. Our rate request will demonstrate a clear need for continued investments to ensure the safety and reliability of the electric system, which is a necessity for both customers and policymakers in reaching their goals to move the state forward. Since our last rate review, we’ve dealt with significant inflationary pressures just like every other sector of the economy and have seen costs for critical equipment and infrastructure skyrocket. In the last 20 years alone, wire and cable costs have soared by 411%, transformers have increased by 265%, and utility poles have jumped by 123%. We have rigorously managed our operating costs despite this enormous pressure from rising inflation for nearly a decade, but we’ve reached a point where current rates can no longer support the investments needed to maintain and improve such a massive, capital-intensive system. It’s also important to note, our letter of intent that we filed yesterday is just notice of a future filing that will involve a year-long rate review, while the initial discourse has jumped to conclusions before the application is even filed. Customers are benefiting from our cost controls and industry-leading reliability, and we want to build on this progress with state leaders.
With respect to our 2025 earnings, the year-over-year increase that has been cited is mathematically due to the absence of significant losses we experienced in 2024 in relation to our investment in offshore wind. No one in New England has invested – or lost – more financially than we have in trying to achieve the clean energy future that policymakers want. That’s not “corporate greed,” it’s commitment to cause. It’s also a known fact that we do not have a guaranteed rate of return. We are earning well below our authorized rate of return, at about 6% compared to the approximately 9% that is allowed.
Attempting to stoke customer anxiety and backlash with false narratives to score political points doesn’t lead to constructive conversations or solutions for the future – in Connecticut, we’ve been there, done that. The state has priorities when it comes to clean energy, housing, and attracting and retaining companies that contribute to the local economy. None of this happens without partnership with the company that delivers reliable power to the state’s electric grid. We will continue to advocate for our customers, as well as constructive partnerships, not political gamesmanship.”