The legislature will convene a special session later this month to vote on a consumer protection energy bill in response to the nearly 900,000 power outages that occurred during Tropical Storm Isaias.  Over the past several weeks the Public Utility Regulatory Authority (PURA) and the legislature’s Energy Committee have held five separate hearings dealing with storm response issues and the July rate increase that enraged customers. The draft legislation that the General Assembly will consider includes the following concepts:

  • Require PURA to develop and adopt a framework for implementing performance-based regulation of each electric distribution company that are in the best interest of ratepayers or that benefit the public;
  • Require PURA to consider the implementation of financial incentives and penalties based on performance;
  • Require that executive compensation that is recoverable through rates be dependent upon the achievement of performance targets;
  • Limit executive compensation that is recoverable through rates that exceeds the mean or median compared to similar service areas or numbers of ratepayers in other states;
  • Consider the implementation of an interim rate decrease, establish a low-income rate, and economic development rates for nonresidential customers;
  • Prohibits electric utilities from recovering its costs associated with its attendance or participation in rate-making hearings;
  • Increases civil penalties from 2.5% to 10% of the electric or gas company’s annual distribution revenue and requires the penalty to be credited to the accounts of ratepayers;
  • Requires the electric utilities to provide to each residential customer a credit of $125 to their customer’s account for each day of service outage that occurs more than 72 consecutive hours after the occurrence of an emergency;
  • Requires the utility to provide compensation in an amount not to exceed $500 for any medication that expires or spoils due to a service outage that lasts more than 72 consecutive hours in duration;
  • Requires PURA to do a cost-benefit analysis to expend storm response efforts;
  • Establish standards for minimum staffing levels;
  • Requires DEEP to determine (and removes the utilities involvement) in the next Integrated Resources Plan (due on Sept. 15th) whether the wholesale market structure in effect at the time of such plan’s adoption is compatible with achieving the policy objectives concerning capacity requirements of customers for the next 3, 5, and 10 years, the manner of how best to eliminate growth in electric demand, how best to level electric demand in the state by reducing peak demand and shifting demand to off-peak periods, the impact of current and projected environmental standards including but not limited to those related to greenhouse gas emissions and the federal Clean Air Act goals;
  • Requires DEEP to evaluate whether Connecticut’s reliance on the wholesale energy markets administered by the regional independent system operator (ISO NE) benefits Connecticut ratepayers, and to recommend alternative approaches to better meet Connecticut’s need for clean, reliable and affordable electricity generation supply;
  • Require DEEP to review the provisions of the Northeast Utilities and NSTAR merger settlement agreement and recommend if any of those provisions need reinstatement or codification;
  • Require the electric utilities to add a “Consumer Advocate” for ratepayers to their board of directors.

CEMA continues to recommend that the following be included in the bill:

  • Placing an immediate moratorium on all efforts related to electrification until there is an independent review of how DEEP and PURA can ensure that their plans to electrify the economy are not subject to future catastrophic power outages. This review should include diversifying our energy mix to ensure that we are not dependent on one source of energy. Please support our call for this action before the utilities fail again.
  • Require DEEP to adopt lower cost alternatives like a thermal renewable energy credit (TREC) program that includes biodiesel as prescribed in Public Act 19-35. This program can lower electric costs and supports local businesses. Please contact DEEP and tell them to put the brakes on electrification efforts and to work with our industry to create a Thermal Portfolio Standards that includes biodiesel.
  • Make PURA to once again be an independent agency that is responsible for overseeing our public utilities. As a subagency of DEEP, PURA does not have the autonomy that it needs to make decisions that are in the best interest of ratepayers. DEEP’s energy policy initiatives need to be counterbalanced with PURA’s ability to protect against uneconomic investments that drive up costs to consumers. This conflict in mission needs to be resolved to protect ratepayers.
  • Since PURA approved the electric rate increase, it makes no sense to have them investigate why rates went up – they approved it so they should know. An independent third party should investigate the utilities to ensure that the rate increase was legitimate and they should also review PURA to verify that their oversight of the utilities storm response and rate increase was prudent and appropriate.
  • Urge the Governor to immediately appoint a permanent Consumer Counsel. It has been about a year that ratepayers have gone without the chief watchdog to protect them from uneconomic investments and higher rates. This position is vital in protecting consumers from a very complex and overly bureaucratic regulatory environment that is impossible for the average person to figure out. Its unacceptable to have such an important position vacant for this long.

CEMA will continue to work to expose why electrification of the transportation and heating sectors is dangerous to the states economy and the welfare of Connecticut’s citizens.