PURA proposed decision on Eversource nearly $1B in storm costs to increase customer rates
The Public Utility Regulatory Authority has issued a decision on how to pay for the $1 billion or more that Eversource paid to repair damage from storms, something certain to be a driver of future electric rates.
PURA has issued a tentative decision that would allow Eversource to charge customers $933 million in costs associated with nearly a decade of catastrophic storms, but said it won’t allow the utility to recover another $397 million in interest it paid on the money it borrowed to repair the storm damage.
If, as expected, PURA approves a plan in coming months to stretch out the collection of the $933 million in storm costs by covering the bill with state-issued bonds, Eversource has calculated it could keep a rate increase in the 11 percent range, substantially beneath what utility analysts had forecast.
Eversource had asked PURA to allow it to pass $1.362 billion – a figure that includes its calculation of $965 million in storm damage costs and about $397 million in carrying costs – to customers. The proposed PURA decision affects costs that have accumulated from a succession of 43 damaging storms from 2018 to 2023.
Electric rates have been rising around the country. In Connecticut, where rates are perennially among the nation’s highest, both Eversource and its rates, have became top campaign issues.
Attorney General William Tong, a reliable Eversource critic, issued a statement Tuesday morning supporting PURA decision denying the company approval to pass the $397 million in carrying costs associated with its storm loans to customers.
“When catastrophic storms hit, the crews who restore our power deserve every ounce of gratitude,” Tong said. “But Connecticut families cannot afford blank checks for utility executives. PURA was right to fully reject Eversource’s unprecedented demand for hundreds of millions of dollars in interest payments on unvetted and unapproved costs.”
CT agency agrees to settle suit; admits improper decision-making by former chair
In its proposed decision released Monday night, PURA said that – based on regulatory precedent – Eversource can only charge customers for interest on damage costs that have been examined and determined to be accurate. That means customers will be liable only for interest costs that accrue after release of the decision Monday night.
Eversource issued a statement questioning the tentative decision denying it millions in accumulated interest payments on borrowed money.
“We are evaluating PURA’s draft decision in relation to the demands of our customers for a speedy and effective storm response,” Eversource spokeswoman Sarah Paduano said. “Important discussions remain regarding how the company will be compensated for the money it borrows in order to adequately meet customer expectations during every restoration when severe weather strikes the state. We look forward to engaging in the next steps of the regulatory process to gain clarity and bring forward the merits of our case.”
Parties to the decision, including Tong and the state Office of Consumer Counsel, will have an opportunity to argue for changes before it is finalized.
The issue of storm damage costs has been a point of contention and one of the issues that soured the relationship between PURA and the states largest utility..
Eversource argued that the damage costs should not have been allowed to accumulate because, when the bill eventually came due, it would result in a rate shock to customers. Former PURA chair Marissa Gillett, who resigned under pressure in October, was using the storm costs as leverage in an effort to force the company to submit to a full rate review.
Although PURA tentatively approved $933 million in storm costs, Eversource will pass just $742 million to ratepayers. About $191 million of the total is being offset by customer contributions to programs created to defer the costs of future storm damage.