Damaging consequences for customers and employees are unavoidable without sufficient funding of essential services
ORANGE, Conn. — November 30, 2023 — United Illuminating, a subsidiary of Avangrid (NYSE: AGR), today issued the following statement regarding application for an interim rate increase of $14 million to the Public Utilities Regulatory Authority (PURA).
“The information provided in today’s interim rate request demonstrates that PURA’s final decision in our rate case has rendered us simply unable to sustain the top-tier reliability and resiliency of the electric grid that our customers deserve,” said Frank Reynolds, President and CEO of UI. “At UI, we take pride in the strong reliability our customers enjoy thanks to our investments in the system. Now, the Authority’s punitive and arbitrary cuts have forced us to make difficult choices on how to maintain a safe and reliable distribution system and protect our front-line union workers, while also compromising our ability to attract the capital investment ultimately needed to provide essential service to our customers at stable, predictable rates. Our efforts to rebuild aging infrastructure, including substations in Bridgeport and Hamden, and to replace our vehicle fleet, which ensures our workers can quickly and safely respond to outages and emergencies, must be deferred until we are allowed to collect adequate revenue to sustain those efforts.
PURA’s actions over the past year suggest that the Authority believes the only way to protect the interests of customers is by trading on the financial integrity of the companies it regulates. But this is a misguided and false choice – if the financial harm to the utility impedes its ability to attract the capital necessary to uphold the strength and resiliency of the electric system, customers will ultimately pay the price. PURA must balance reasonable costs for customers with the financial integrity of the companies it regulates while keeping an eye on the future of the electric system and the state’s public policy goals. As PURA reviews this interim rate filing, we urge the Authority to uphold that commitment by approving our reasonable, equitable request for $14 million in interim rates, which will protect the integrity of our company and enable us to maintain the standard of service our 341,000 customers expect and demand.”
UI’s Application for Interim Rates requests PURA to provide $14 million annually in incremental base revenues starting February 1, 2024, in accordance with Conn. Gen. Stat. § 16-19(d). Connecticut law allows PURA to authorize an interim rate increase as necessary to prevent substantial and material deterioration of the financial condition of a public service company or to prevent substantial deterioration of the adequacy and reliability of service to its customers.
The company is not filing a full rate case currently, but is simply requesting an interim rate increase, which is roughly 50 percent of the amount currently disputed and on appeal to the Connecticut Superior Court. There is no risk to customers of paying rates in excess of what the Connecticut Superior Court rules are just and fair because, per Connecticut law, the increase is subject to refund with interest, guaranteed by a surety bond, if the interim rates ultimately exceed the rates that are fixed at the conclusion of the company’s appeal.
UI’s Application for an interim rate increase is necessitated by the Final Decision rendered in UI’s rate case on August 25, 2023, denying recovery of both “used and useful” and future capital projects as well as operating expenses, in contradiction to Connecticut law, U.S. Supreme Court precedent, or the Authority’s own precedent.
To support this request, UI submitted testimony from UI President & CEO Frank Reynolds; UI Vice President of Electric Operations Chuck Eves; and Avangrid Networks Vice President and Controller Andrea Vanluling, Avangrid Networks Senior Vice President of Planning and Regulation Kevin Donnelly, and Avangrid Service Company Director of Revenue Requirements Jacob Hurwitz. Their testimony provides exhibits and supporting evidence of how PURA’s August 2023 Final Decision is causing material harm to UI’s financial condition; employee health, welfare, and retention; and the customer experience.
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