The Connecticut Energy and Technology Committee met on Tuesday for an informational meeting with the various state bodies it oversees. In addition to the Department of Energy and Environmental Protection (DEEP), the committee heard testimony from Connecticut’s largest electric utility, Eversource, as well as Marissa Gillett, Chairman of the Public Utilities Regulatory Authority, which oversees Eversource.
Chairman Gillett was largely on hand to offer an overview of her agency’s work and procedures as well as to provide guidance for constituents who might want to learn more or voice their concerns. But that didn’t stop her from being forthright when it comes to what she has previously characterized as a distinct lack of power to truly regulate the state’s utilities.
During the question and answer portion of the presentation, state legislators pressed Gillett about the recent increases in rates for Eversource and United Illuminating customers.
“Why is it — with your enforcement authority and with the additional tools we’ve given you most recently — you can’t snap your fingers and force the utilities to lower their rates?” asked Committee Co-chair Rep. Jonathan Steinberg (D-Westport), in a tone that suggested he knew the answer.
Gillett responded by breaking down the various “buckets” that contribute to your electric bill, including public policy costs, supply costs, and distribution costs. She emphasized that, because supply rates were deregulated by the legislature in the 90s, she has no legal authority to regulate them.
Distribution rates are another story, as there are several legal avenues PURA can pursue to investigate, challenge, and strike down certain elements.
“Importantly, I can only exercise those tools in a distribution rate proceeding, and I have been hugely vocal, probably to the displeasure of many, about my displeasure with the use of settlements and the fact that that keeps the utilities out from before us,” she stated strongly. “The fact that I’m going into my fifth year and have not seen a rate case from our largest utility in this state is a travesty.”
Distribution rates are made up of a wide variety of factors, including the recuperation of costs for infrastructure updates, some public policy costs, and can even include things like executive compensation and charitable donations.
“I firmly believe that until they come in for a rate case and we can look under the hood and see what’s going on, I won’t have an answer to that question,” she concluded.
Executive compensation came up in a later question from Committee Ranking Member Bill Buckbee (R-New Milford) who asked whether PURA takes profits into consideration when determining the fairness of rates.
Gillett answered that yes, they do consider things like executive compensation when they assess distribution rates during rate cases, an authority they were given with the Take Back Our Grid Act in 2020. There are, however, limitations, once again because of the deregulation of the supply.
“We get the question about the supply rates. And certainly, there’s frustration knowing what the executives at some of these companies are compensated at, when the supply rates have increased,” she said. “And while I appreciate that frustration, the supply rates, being that they’re deregulated, are not a distribution rate proceeding, is not an opportunity to exercise that authority.”
Energy costs have become a major priority for the state legislature during the 2023 session, thanks to a massive jump in supply rate costs that went into effect in January. Since the start of the year, Gov. Lamont has announced increases in assistance programs to combat those costs, and legislative Republicans have outlined a detailed plan to force those costs down through tighter regulation, and a broadening of clean energy rules.
