(Hartford, CT) – Attorney General William Tong today called on the Public Utilities Regulatory Authority to reject a “bloated, unsupported” $130.7 million rate hike sought by United Illuminating, and to further impose a $2 million annual penalty for the company’s ongoing failure to remediate the former English Station power plant in New Haven.
United Illuminating is requesting to raise electric rates by as much as 8 percent over three years, increasing its revenues by $91.1 million in the first year alone, followed by an additional $20.1 million in the second year, and yet another $19.5 million in the third year. New rates would take effect after September 2023.
Attorney General Tong’s brief identifies numerous areas where the utility is seeking to shift inflated, inappropriate costs onto ratepayers, including subsidized dog walking for employees working from home, “loyalty” bonuses for workers, advertising and membership fees, and an increased profit margin far exceeding the return on equity for any publicly regulated utility in Connecticut, among many other areas.
“On September 9, 2022—at a time when its customers were struggling to afford their skyrocketing electric bills—UI filed a bloated, unsupported proposal to increase its electric distribution rates by $136.5 million* over the next three years. During the next seven months of administrative litigation before PURA, the Company failed to meet its burden to justify its exorbitant rate increase proposals, despite answering over 1,800 interrogatories from stakeholders, testifying over the course of 15 total evidentiary hearings, and answering 145 Late-Filed Exhibits. The Company failed to demonstrate, as it must, that its proposed distribution rate hike up to 8 percent in the first rate year is necessary to provide safe, adequate, and reliable electric service,” Attorney General Tong states in the brief.
*United Illuminating initially sought a $136.5 million increase. They subsequently amended their request to $130.7 million.
English Station operated as a coal and oil-fired power plant for United Illuminating from 1929 until it was deactivated in 1992, leaving behind a site extensively contaminated with polychlorinated biphenyls (PCBs), a known carcinogen, heavy metals, and other contaminants.
United Illuminating is obligated by a 2015 PURA order to remediate certain environmental conditions at English Station regardless of cost. UI was required to do so within three years of a 2016 Partial Consent Order between United Illuminating and the State. Since then, the company has made little to no progress, including failing to secure the site so that individuals vandalized the property exposing themselves to harmful contaminants well after the property was supposed to be remediated. The company has cycled through six project managers, who appear to lack any meaningful decision-making authority, contrary to PURA’s directive in the matter.
“UI committed to fully remediate the English Station site within three years…These commitments were made to the State in the Partial Consent Order and to the Authority as a condition of its proposed acquisition by Iberdrola. UI has failed utterly in those commitments. Seven years later, UI has spent less than $17 million—the accounting for which DEEP has neither approved nor accepted—and the site remains a contaminated blight on the residents of New Haven who were promised better. There remains no completion date in sight,” Attorney General Tong states in the brief.
PURA “should send a message that this continued delay will no longer be tolerated. UI’s continued failure to make reasonable progress is not an accident—it represents a deliberate corporate policy of indifference to the residents of New Haven, the State, and to this Authority…. A 20 basis point penalty represents approximately $2 million each year…This ROE penalty should continue until the site is fully remediated, and DEEP has so certified,” the brief states.
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