Officials from United Illuminating (UI) announced on Monday that they intend to file a request to increase rates with the Public Utilities Regulatory Authority (PURA), which will include a request for $105 million in new revenues that UI says will be spent on major and badly-needed infrastructure projects.
However, state Attorney General William Tong is classifying this latest request as “tone deaf slap in the face to Connecticut families.”
According to the notice, UI will request PURA to approve an increase in distribution operating revenues of around $105 million for the 12-month rate year beginning November 1, 2025. This would mean a 9.3% increase over currently authorized overall revenues, and approximately 34.2% over currently authorized distribution revenues.
“Electric rates are through the roof right now and consumers cannot afford to pay more. United Illuminating asked for and received a revenue increase just last year,” Tong said. “They did not get everything they asked for because their absurd $130.7 million application was exorbitant and unsupported by facts and evidence. They’ve been stomping their feet ever since.”
The filing, according to UI, will occur by the end of November.
The company said the $105 million in additional distribution revenue will go toward major infrastructure projects. They further stated that the $105 million includes $41 million that are for projects currently serving customers that have not been included in rates.
According to the Notice of Intent filed on Monday, UI states that the incremental revenues are “critically needed to support more than 350 major infrastructure projects across UI’s service area, the majority of which will be located in and serve disadvantaged communities.”
Among the projects mentioned by UI is a rebuild of a 1960’s-era substation, primarily located in Bridgeport and southern Trumbull, that serves nearly 18,000 customers.
UI wants to replace century-old splice chambers in New Haven, Bridgeport, and Ansonia. The company also wants to decommission the 70-year-old substation on Whitney Avenue in New Haven and replace it with more modern infrastructure for the 2,000 customers in New Haven and Hamden it serves.
UI had not requested a change to its distribution rates in nearly six years when it filed a general distribution rate application in September 2022. The company says in the notice that PURA had previously approved a multi-year rate plan that allowed for stable rates while allowing the company to earn sufficient revenues.
But in August 2023, PURA rejected UI’s proposed distribution rate increase of $131 million over three years in favor of a $22 million increase over one year.
“PURA’s August 2023 final decision on UI’s 2022 rate filing caused serious financial harm to UI, leaving the Company with insufficient revenues to operate the business at pre-existing levels and requiring the Company to scale back capital investments and retrench on operating expenditures,” the notice reads. “In fact, UI’s actual earned return on equity for the twelve months ending June 30, 2024, was only 3.94 percent – below its actual cost of long-term debt. Accordingly, UI’s current financial condition is neither sustainable nor in the best interest of customers, notwithstanding the austerity measures that the Company has undertaken to try to maintain financial integrity and attract necessary capital resources.”
According to the notice, UI said its credit rating was revised from “stable” to “negative” by the Standard & Poor’s Global credit rating service. Earlier this month, the notice states, Fitch Ratings issued a press release in which it revised UI’s outlook from stable to negative due to “ongoing regulatory challenges in Connecticut.”
UI said a new general distribution rate application became necessary to cover the “reasonable and good-faith costs of operating the system and completing plant additions that assure safe and reliable service to customers.”
In addition to the infrastructure improvements, UI also wants to invest in other areas including battery storage projects in New Haven and Bridgeport; improved customer service using generative AI on the company’s website, improvements to Interactive Voice Response (IVR) technology on UI’s call-in system, and training for front-line workers.
File photo of Connecticut Attorney General William Tong speaking to reporters in 2022. Credit: File photo / CTNewsJunkie
However, Tong said the latest notice is a “bad faith maneuver” and “an insult” to Connecticut families who are struggling to pay these bills.
“I am going to scrutinize every penny of this pending application and will fight at every step of this process on behalf of Connecticut families and businesses,” Tong said.
In its notice, UI says that company officials realize that its customers are facing tough economic times, so the company will propose continuing its low-income discount rate. They will also propose the continuance of an economic development rate to support commercial growth.
“UI also well understands that no customer welcomes an increase in electric rates, even with financial hardship considerations aside,” according to the notice. “However, customers have high expectations for service reliability and customer service and meeting those expectations comes at a necessary and unavoidable cost that requires the use of external debt obtained from the marketplace with the expectation of a reasonable return.”
UI serves approximately 345,000 residential, commercial, and industrial customers in southern Connecticut.