Connecticut electric ratepayers are on the hook for roughly $20 million for startup companies based in other states and countries to test new electric grid technologies in Connecticut under a program initiated by the Public Utilities Regulatory Authority (PURA) and paid for through customer electric bills.

According to 2024 and 2025 rate adjustment documents submitted to PURA by United Illuminating and Eversource, each company projects expending roughly $10 million each for phases 1 and 2 of the Innovative Energy Solutions (IES) program, a program PURA says is authorized under 2007 legislation that created the Electric Efficiency Partners Program.

“The Public Act required the agency to begin offering the program as of April 1, 2008, with an annual funding cap of $60 million,” wrote PURA Director of Legislation, Regulations and Communications Taren O’Connor in an email. “While the IES Program adheres to all statutory requirements articulated in the Public Act for the EEP Program, the IES successor program was specifically designed to build on several key lessons learned from the original EEP Program, including by establishing more robust ratepayer protections such as a lower overall program budget.”

So far, that $20 million is mostly going toward technology companies located in other states and other countries. PURA has approved 16 technology pilot programs thus far, with only two going toward Connecticut-based companies; nine going to companies based in other states like California and Washington; and five going to companies based in other countries, mostly the United Kingdom. 

The IES program has a $5 million cap for each project, with a $25 million cap for each phase, according to PURA’s final decision. The utility companies can then recover those costs through the rate adjustment mechanism, meaning the costs get put onto ratepayers.

PURA says that regardless of where the companies are located, they must meet certain criteria to ensure economic benefit, cost-effectiveness, solutions for market gaps, and equity. The program also allows PURA to end the project if it is not meeting criteria for each of the four phases, “thereby avoiding unnecessary risk and costs to ratepayers,” O’Connor wrote.

Many of the pilot programs are based around electric vehicle charging and artificial intelligence. AmpUp, a San Francisco based company founded in 2018, is piloting new EV charging technology, while GridEdge, based in Birmingham, UK, is testing AI technology to get commercial buildings to “net zero.”

Piclo, a company based in London, put out a press release in July of 2024 touting their partnership with UI and Eversource to “launch Connecticut’s first Distributed Energy Resource (DER) market, hosted on Piclo.”

“This marketplace was launched via the Innovative Energy Solutions (IES) Program, a statewide initiative led by the state’s Public Utilities Regulatory Authority (PURA) to identify, pilot, and scale innovative ideas that help build a decarbonized, affordable, and equitable electric grid for Connecticut,” the press release states.

KrakenFlex, another UK-based company, was selected by PURA, in part because the “application demonstrates Economic Benefit by incentivizing sales and installations of clean technologies (EV chargers and heat pumps), which would indirectly generate local revenue and jobs,” although KrakenFlex did not “currently have plans for local hiring,” according to PURA’s cycle 1 interim decision.

“KrakenFlex’s Proposed Project budget of $1.1 million includes no direct cost to customers, other than the IES funding request recovered through rates,” the decision states.

The IES program is part of PURA’s equitable modern grid framework, launched by PURA in 2019, shortly after Marissa Gillett became chairman, under a docket the regulatory authority opened on its own. 

According to PURA’s “strategic vision” document outlining the goals of the IES program, utility companies often “avoid risks for safety, security and reliability,” and the program allows unproven technologies to be explored quickly within a “regulatory sandbox” for possible future use in Connecticut, ostensibly to save ratepayers money through the inclusion of more efficient technology.

“Innovation requires testing unproven concepts and technologies and pursuing ideas that may very well fail,” PURA wrote. “Regulatory sandboxes open the door to testing new approaches within a controlled environment. While they do not ensure success, they make it possible for new technologies and tools to be explored in real-world settings – not just so that innovators can learn, but also to allow regulators and stakeholders to catch up to the present and adapt to the future.”

O’Connor says the IES program “The IES program provides a clear pathway by which to move a successful pilot project to full-scale deployment across the state’s two largest EDCs’ territories,” O’Connor wrote. “This ensures that successful pilots are brought to scale, thereby delivering the benefits of innovation to all ratepayers.”

While Connecticut ratepayers are funding the pilot tests of these technologies to the tune of $20 million, those companies have also received considerable investment from venture capital firms. AmpUp, for instance, closed a $15 million series A round of funding in September of 2024, which included investment from Connecticut Innovations, the state’s quasi-public venture capital agency.

During her lengthy confirmation hearing before the Executive and Legislative Nominations Committee, Gillett testified PURA was partnering with CT Innovations and the CT Green Bank, another quasi-public agency partially funded through the public benefits charge on ratepayers, in supporting these ventures.

“I am immensely proud to report that PURA staff recently completed the initial 11 tracks of PURA’s nation-leading Equitable Modern Grid Initiative,” Gillett said during the hearing. “What started as an ambitious vision for ways to modernize Connecticut’s aging electric infrastructure has yielded frameworks and programs recognized as models throughout the country including an industry leading Innovative Energy Solutions program that provides a sandbox environment to test emerging technologies and facilitate strategic partnerships with multiple state agencies, universities and utilities.”

The IES program is only one of many under the equitable modern grid framework, which includes other programs supported by ratepayer dollars, like the Connecticut EV Charging Program, which is projected to cost UI customers $8.3 million in 2025, and Eversource customers $17.4 million through the public benefits charge on ratepayers’ bills, which pays for programs mandated by the government. 

Those public benefit charges spiked during the last electric rate adjustment to make up for COVID-era costs related to a power purchase agreement with the Millstone nuclear power plant and uncollected payments. The increase led to public outrage and started a political fight that continues, with energy costs as one of the dominant concerns at the legislature.

But while the IES program is meant to potentially bring new technologies to Connecticut’s grid, utility companies say PURA’s heavy regulatory hand is hurting their credit ratings and causing them to pull back on future investments. Eversource plans to cut $500 in investments from Connecticut over the next five years, and those decreases could affect other programs pushed by PURA’s equitable modern grid framework, like smart metering. 

Similarly, UI says a rate decision by PURA forced them to eliminate $70 million in grid upgrades, as the company deals with lowered credit ratings and a reported 31 percent decrease in distribution net income for 2023. 

Connecticut’s utility giants have been pushing for Gillett’s removal arguing in the media and in a lawsuit that she is not following proper legal procedure and is essentially running the Authority on her own, issuing intermediary decisions under the guise of the full board of commissioners.

Gillett squeaked through the nominations process with the support of Gov. Ned Lamont and Democrats, following a reported backroom deal that would turn PURA into a quasi-public agency and boost the number of commissioners to the statutorily required five, and purportedly include Sen. John Fonfara, D-Hartford. 

Fonfara’s supposed PURA seat could be in jeopardy, however, after a bill was proposed that would bar anyone who had been fined by PURA from serving as a commissioner. Fonfara was part owner of a third-party energy supply company called Wattifi that was fined over $1 million by PURA, after the authority refused to allow Wattifi to relinquish its license, even after the company had dissolved.

General Assembly Republicans have pushed to remove the public benefits charge from ratepayers’ bills altogether and have those costs covered by the state’s General Fund, a proposal that was met with resistance by both majority Democrats and the Department of Energy and Environmental Protection, who said it would defund “critical energy investments.”

Democrats proposed and passed out of committee their own bill which, among other things, would seek to expand nuclear electricity generation.

The IES program is only in its second of four phases, and the companies must file periodic progress reports during the implementation period, after which “the Authority will determine then whether any projects demonstrate sufficient ratepayer benefits to be further scaled,” O’Connor said.

The two Connecticut-based companies approved to run technology pilot programs through IES thus far were Noteworthy AI in New Haven, a company founded in 2020 that uses AI-powered cameras on utility fleet vehicles to identify telephone pole defects, and Roundtrip EV Solutions out of Stamford that specializes in electric garbage trucks. 

On January 7, 2025, Noteworthy AI announced an award of $1.79 million through PURA’s IES program, saying they are partnering with UI to “improve grid reliability, resiliency, and operational efficiency.”

“This project marks a major milestone as we work to transform utility infrastructure management,” said Chris Ricciuti, Founder and CEO of Noteworthy AI, said in a press release. “We’re excited to partner with UI to further develop our technology and demonstrate its positive impact on grid reliability and operational efficiency.” 

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