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Tuesday, August 4 Business

Rate hike suspended as usage drives electric bills higher

State regulators suspended an Eversource customer rate increase Friday that took effect at the start of July, even as the company pledged to work with electricity customers struggling to pay bills that popped in tandem with a summer heat wave.

It was a highly unusual move by the Public Utilities Regulatory Authority amid an uproar over skyrocketing bills, with elected officials in both parties calling for rollbacks and investigations in recent days. An Eversource spokesperson indicated the company will comply promptly and reiterated any customers struggling with bills can contact it to explore alternative payment arrangements.

“We understand and share concerns that customers are expressing regarding recent higher-than-normal bills,” stated Eversource spokesperson Tricia Modifica, in an email Friday afternoon. “We will work quickly to enact PURA’s temporary suspension of the rate adjustment and look forward to participating in the process to ensure transparency for customers and policy makers.”

Some families have complained of bills doubling to more than $300, even as they continue to hunker down during the COVID-19 pandemic that has put more than 250,000 Connecticut residents onto unemployment compensation.

In fact, taking into account all the charges on a customer’s bill, Eversource rates went down on July 1, not up, as the biggest element — the cost of generation — declined by 22 percent for customers who pay the standard rate. Those rising bills are largely the result of increased electric consumption for air conditioning.

But the agency took aim at a charge that did increase, in part because of a special deal the state gave the owner of the owner of Millstone nuclear plant in Waterford last year. In July, Eversource customers began paying nearly twice as much as before for the power generated by the Millstone, along with an additional “transmission access” charge mandated by the federal government.

Combined, the two measures amount to about $25 extra on the average home’s bill if a household is using air conditioning.

Gov. Ned Lamont had brokered the increase for Millstone last year — a change in the way the nuclear-generated electicity was purchased — citing a threat from operator Dominion Energy that it might seek to shutter Millstone if it could not earn profits that are competitive with those of electricity plants fired by natural gas.

Those natural gas plants are paying historically low prices for fuel that has pushed some drillers into bankruptcy.

On Friday, Lamont pledged to have his administration weigh in during a PURA hearing slated for August 24. The issue is complicate by the fact that Eversource, United Illuminating and other utilities do not make more or less money as the generation rates rise and fall.

“It was just worth taking a pause,” Lamont said Friday afternoon in Hartford. “Let’s face it, the people of Connecticut [and] the people of this country have gotten slammed by a COVID economy over the last four months. The last thing you wanted to see was a big, new electric bill coming in.”

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He continued, “We’re doing everything we can to make sure you have confidence that if there is an increase, why there’s an increase and make sure there’s no excess.

He added that the state is “doing everything we can” to advance energy efficiency measures, “to make sure it makes it less expensive for you to cool your home in the summer and heat your home in the winter.”

‘Making plenty of money’

PURA made a quick decision after opening a probe this week at the request of nearly a dozen members of the Connecticut General Assembly.

In a separate action Friday, U.S. Sen. Richard Blumenthal (D-Conn.) and state Attorney General William Tong asked federal regulators to postpone for one year the new transmission access charge that they estimated tacked $9 on average to household electricity bills in June.

Electricity usage has spiked on a spate of hot weather this summer, as more families turn up the air conditioning while at home during the COVID-19 pandemic.

“The bills in general are due to much hotter weather in June and more customers working at home,” said Philip Lembo, chief financial officer of Eversource, speaking early Friday. “People are hurting [and] we want to be part of the solution here. ... We are working closely with all our customers, the regulators and other folks to get the message out.”

PURA ordered the rollback Friday, with its executive secretary Jeffrey Gaudiosi noting in a letter to Eversource the suspension is temporary as PURA conducts its query amid “numerous” complaints it has received. Earlier in the day, Eversource indicated thousands of customers have called about their bill increases.

“The intent of this reexamination is to ensure that Eversource is not over-collecting revenues in the short term at the expense of ratepayers during this period of financial hardship,” Gaudiosi stated in his letter to Eversource.

In Hartford on Friday, Blumenthal weighed in on PURA’s action, calling the rate increase “absolutely damaging to our whole economy.” Blumenthal also said the Millstone agreement needs to be looked at anew, but kept the focus on Eversource.

“PURA has provided a short-term solution — it suspends the rate increase — but what we need is a more fundamental solution,” Blumenthal said Friday. “This utility’s making plenty of money.”

Special payment plans

On a Friday morning conference call, an Eversource executive estimated the new Millstone terms added 3.5 percent to customers’ most recent bill in Connecticut while noting customer consumption was 26 percent higher in June on average as measured in kilowatt hours.

July bills, due to hit mailboxes next week, will reflect the full Millstone impact of the increase in a federally mandated “congestion charge” that appears as “FMCC Delivery” on bills. The new rate nearly doubled to nearly 3 cents per kilowatt hour, which for many customers could add $15 or more to their monthly amounts due, depending on the degree to which they use air conditioning, basement dehumidifiers as a guard against mold, electric vehicles or other major appliances.

Eversource has created a “COVID-19 Payment Program” in which any customer can enroll, through which they can defer payments over up to two years without fees or interest, with a deadline of Nov. 1 for residential customers to sign up and Oct. 1 for business customers.

The company is also expanding enrollment in an existing “New Start” program through which customers can get overdue balances forgiven if they are otherwise up to date on current amounts due. New Start eligibility is typically limited to customers with combined income at less than 60 percent of the state’s median income, or less than $70,000 for a household of four.

Information is online at www.eversource.com; customers can inquire on their eligibility for any programs by phone as well at 1-800-286-2000.

The company has not adjusted the income limits on the program, according to Penni Conner, chief customer officer for Eversource, but more customers in Connecticut now qualify due to having lost jobs or otherwise seen their income reduced during the pandemic. As of mid-July, the U.S. Department of Labor listed 253,000 state residents receiving unemployment compensation, about 3,200 more than the previous week, not including nearly 50,000 more people who qualify as independent contractors under the federal Pandemic Unemployment Assistance program.

“We want them to call in, because we have programs that ... can help them,” Conner said Friday morning during an interview. “June was 13 degrees warmer than the previous June [and] bills are high. August is going to also be very high. ... A lot of customers who perhaps did not qualify before may qualify today.”

She added Eversource has seen an 11 percent increase in the number of customers classified as delinquent in payments, of those six weeks past due on bills of $75 or more.

Moratorium on shutoffs

Eversource is the largest utility in New England with some 4 million customers, running the company from dual headquarters in Boston and Hartford and a sprawling operations hub in Berlin. Eversource’s electric transmission and distribution services span Connecticut, Massachusetts and New Hampshire; the company also provides water service through its Bridgeport-based Aquarion subsidiary, and natural gas as well.

Orange-based Avangrid is Connecticut’s other major electric transmission service provider via its United Illuminating division.

Earlier this week, the Connecticut Office of Consumer Counsel asked PURA to authorize a United Illuminating repayment of more than $8 million to consumers, after the company requested permission to do so in March after better-than-expected profits last year.

Under a Lamont executive order early into the COVID-19 pandemic, utilities are prevented from discontinuing service for nonpayment of bills. Massachusetts and New Hampshire put similar bans in place, with Gov. Chris Sununu having lifted it since in New Hampshire. Eversource stated Friday it has not implemented shutoffs in New Hampshire since the state’s moratorium reached its sunset in mid-July.

Over the three months prior to the Dominion bump, Eversource spent $9 million more for purchased power, fuel and electric transmission costs, a 1.4 percent increase from the second quarter of 2019.

Eversource’s electric transmission and distribution operations produced profits of $246 million in the second quarter, up $22 million from the year before. Under Connecticut’s “decoupling” law, Eversource and Avangrid cannot profit off higher costs for power that is purchased for transmission over their lines to customers.

Eversource’s overall 2019 earnings were impacted by a $204 million charge to account for the utility ending its Northern Pass proposal to build new transmission lines in New Hampshire to import hydroelectric power from Canada. Avangrid is now pushing ahead with a plan to run lines south through Maine.

Eversource filed separately on Friday an overarching proposal to modernize Connecticut’s grid, to include advanced customer meters, electric vehicle chargers, and batteries to store the electricity generated by renewable sources of energy.

Staff Writer Luther Turmelle contributed to this report. Corrected from an initial version to include Eversource reply to a Friday afternoon query.

Alex.Soule@scni.com; 203-842-2545; @casoulman

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