The Public Utilities Regulatory Authority on Wednesday voted unanimously to approve $861 million of Eversource’s catastrophic storm costs between 2018 and 2023, but denied the company’s request for roughly $1.4 billion, including $400 million in interest charges, and further reduced the impact to Connecticut ratepayers by applying money set aside over several years to aid ratepayers.
PURA utilized $90 million in storm recovery cost reserves and an additional $100 million through the company’s Competitive Transition Assessment mechanism, combined with rejecting the company’s bid for interest, to lower the overall impact on ratepayers from $1.4 billion to $667 million. The final decision was a further reduction from PURA’s draft decision, which similarly denied the interest charges, but found $933 million in prudently incurred costs.
According to the discussion by PURA commissioners, the Authority determined the company miscalculated some storm and prestaging costs; the company combined costs related to several smaller storms to reach the catastrophic storm threshold of $4 million in costs and found one storm did not meet the criteria of a catastrophic storm.
PURA determined that Eversource could only seek interest payments for storm costs determined by the Authority as “prudent,” and so will allow interest charges moving forward from the decision. The decision indicates that the number of years and number of storms made determining proper recovery exceptionally difficult.
Commissioner Janice Beecher said she wanted to personally reiterate her discomfort with allowing interest costs moving forward, but agreed with the final decision.
“I want to reiterate my hesitation about the compensatory rate carrying costs in light of the antiquated practice of rate-basing regulatory assets,” said Commissioner Beecher during discussion on the decision. “The idea of ratepayers paying equity returns on deferred expenses associated with force majeure still gives me pause.”
Commissioner Everett Smith said that costs had been allowed to build up for an “unacceptable” amount of time and said this decision doesn’t account for costs that have built up since 2023, including numerous catastrophic storms, “which may total millions of dollars based on past experience.”
“We seem to be in a never-ending game of catch-up, and that is not good for anybody,” Smith said. “Storm recovery needs a fresh approach to ensure this situation does not occur again. While the securitization plan provides a solution for past storm costs, it does not provide a dependable plan for the future.”
Eversource had alleged in previous filings that former PURA Chairman Marissa Gillett had improperly delayed a prudence review for storm costs in 2021 when storm recovery costs were $634 million, and argued the company was owed interest – called carrying charges – on the costs they had already incurred.
According to attorney Cheryl Kimball, Gillett insisted that the company would have to submit to a rate review in order to recover storm costs, something the company wanted to avoid given its contentious relationship with Gillett and the fact that she was violating state statute by unilaterally controlling PURA proceedings, according to filings submitted by Eversource.
Elected officials seized on the draft decision to lambast Connecticut’s largest regulated utility company, particularly because the decision comes ahead of Eversource’s long-delayed rate case in which the company is requesting an 11 percent increase, as the state rolls into November elections with a public that is angry over the state’s high electricity rates
Attorney General William Tong, whose office is party to PURA proceedings, said PURA was right in not allowing Eversource to charge interest and said 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,” Tong said in a press release. “I’m going to keep fighting in every single proceeding before PURA to scrutinize every expense and line item to ensure Connecticut families do not pay a penny more than absolutely necessary.”
Gov. Ned Lamont oversaw the conflict between the utilities and Gillett, whom he handpicked as PURA chairman, and issued an unusual and scathing press release in response to Eversource’s rate increase request, criticizing the CEO’s salary and saying it “keeps me up at night.”
“Eversource seems to be claiming they’re losing money on Connecticut. Maybe their numbers are real, but when they simultaneously post $1.69 billion in profit and pay their CEO $13.5 million last year, it makes you wonder if they’re relying on a convenient, creative form of math,” Lamont, who made roughly $54 million in 2022 from his investments, said in a press release. “The decision on this rate increase belongs to PURA, Connecticut’s independent utility regulator. That independence is real, and it’s important. It is their job, not mine, to say yes or no.”
Although Connecticut has long had some of the highest electricity rates in the nation due to higher supply costs, public anger reached a fever pitch in 2024 when Eversource and Avangrid sought repayment of public benefits charges that had been long delayed by Gillett even after the pandemic was over.
The resulting effect on ratepayers’ bills, combined with legal action taken by the utility companies against PURA and the subsequent media firestorm, all thrust electricity prices into the front and center of Connecticut politics. Efforts by the General Assembly to lower costs through removing a portion of the $1 billion paid by ratepayers to support programs and contracts mandated by the General Assembly have had little effect on reducing electricity costs.
The issue is top of mind in the upcoming gubernatorial races, with Lamont, who has been in office for two terms, facing a primary challenge from Rep. Josh Elliott, D-Hamden, who proposes allowing more municipalities to control their own grids. The Democratic Party primary winner will go on to face Sen. Ryan Fazio, R-Greenwich, who has advocated for reducing or eliminating the public benefits charge on ratepayers’ bills.
A 2025 letter sent by Eversource Vice President for Distribution Rates and Regulatory Requirements Douglas P. Horton to Senate President Pro-Tem Martin Looney, D-New Haven, outlined $3 billion in costs to be considered in the next rate hearing, including not only the storm recovery costs, but also a potential $1.2 billion in costs associated with installing smart meters which, reportedly, help lower energy usage and increase efficiency.
Implementation of an advanced smart metering program was mandated by PURA in 2024; however, Eversource has contended that there are obstacles in the way of rolling out the infrastructure, not least of which is the increase in costs since PURA first began to investigate the potential rollout of smart meters, and disagreement on whether and how Eversource can recover their costs.
While PURA is allowing Eversource to recover $667 million, it is not yet determined how much that will affect ratepayers. According to PURA’s storm recovery decision, the Authority will determine whether it is in the best interest of ratepayers “for Eversource to finance the recovery of deferred storm costs through the issuance of rate reduction bonds.”
Commissioner Holly Cheeseman said this decision “is very much about the past,” with a deep dive by the Authority hopefully resulting in “wisdom,” but said she wanted to address the future, hoping that wisdom will lead to better practices moving forward, including not allowing costs to build up for so long.
“The unavoidable reality of this case, which was inherited by all five current commissioners, is that Eversource did spend money on responding to catastrophic storms,” PURA Chairman Thomas Wiehl said. “In my opinion, we should never have gotten to this place. The magnitude and scope of these costs should not have accumulated without PURA’s more frequent review, and we should never let this happen again.”
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