PURA gives Eversource customers a $142 million credit, half what the company proposed
The Public Utility Regulatory Authority has decided in a decision released Wednesday to cut by about half — from the $275 to $142 million —the money Eversource had proposed returning to electric customers as a credit on bills over the coming year.
Eversource said Wednesday an average residential customer could save about $13 a month on bills beginning May 1 and extending for a year as a result of the $142 credit.
The difference in amounts of benefit to customers is based on disagreement between the regulatory authority and utilities over how to revise electric rates each year, a revision based in large part on forecasts of price volatility and the other other factors that determine how much Eversource and United Illuminating pay for the energy they distribute to their Connecticut customers.
PURA revises electric rates in what is called a RAM or annual rate adjustment mechanism based on actual past utility spending. Eversource has been unable to persuade PURA to allow it to use forward-looking market forecasting, which the utility argues shows currently that its customers are due a bigger rate reduction.
The utility argues forward-looking forecasting presents a more reliable rate picture, while PURA has taken the more conservative view, arguing that overly optimistic forecasts could result in under collection of costs in the short term, burdening customers with “rate shocks” in follow on years.
Eversource wants to return $275M to electric customers. CT regulatory agency says not so fast.
“We have been advocating since last year that PURA revise its RAM process, which currently requires us to rely on prior year actual net benefits and costs in setting the RAM rates, to update its process so that we can incorporate the best available information,” Doug Horton, Eversource Vice President, Distribution Rates & Regulatory Requirements said at a PURA hearing on April 11.
PURA argues that the Eversource market forecasts are fluid and, as a result, unreliable. It rebutted the Eversource contention in a statement that reveals the mistrust that has characterized the authority’s relationship with the utility industry under current chair Marissa Gillett
“However, there is a significant risk that the projected $275 million will not materialize and, as confirmed by the Company, this risk would be borne solely by ratepayers, not Eversource’s shareholders,” PURA said..
“Importantly, the $275 million is not a credit,” PURA said. “The use of this terminology implies that these funds were previously over-collected from customers in a prior RAM year. In reality, while $142 million of this amount refers to actualized proceeds from the first quarter of 2025 (which is reflected in PURA’s Interim Decision), the remainder is tied to speculation for how the market will perform during the rest of 2025.”
PURA said in a decision published Wednesday on current year rates that it will continue to review market forces in coming months and could further reduce customer bills “as then-observed market conditions warrant.”
Eversource said it persuaded PURA to raise the amount of the credit from what the authority proposed originally in a draft decision. It said most of the savings comes from the public benefits portion of bills, specifically state-mandated power purchase agreements, including the Millstone and Seabrook nuclear power plant contracts.
PURA released a similar, annual rate decision Wednesday for United Illuminating. It resulted in a negligible reduction in bills for UI customers of about 11 cents a month. United Illuminating serves the southern part of the state, including Greater New Haven. Its headquarters are in Orange.
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