The views stated here are those of the author and do not necessarily reflect those of the editors of this newspaper. We welcome supporting or opposing views on any published item. Received January 3, 2025.
Senator Norm Needleman — Senate Chair of the legislature’s Energy and Technology Committee and First Selectman of the Town of Essex — urged his fellow Connecticut municipal leaders to resist fear-mongering tactics recently employed by regulated utility companies.
The statement follows a letter received by many municipal leaders, including Senator Needleman, from Eversource executives on December 30, 2024. The letter, framed as an “update,” suggested that recent rate decisions by the Public Utilities Regulatory Authority (PURA) would impede the company’s ability to serve municipalities and deter private utility companies from making capital expenditures meant to improve the grid.
“These monopolies have shifted their strategy,” Senator Needleman said. “Instead of engaging solely in the regulatory process, they’re now airing their objections in a modern news media that thrives on controversy and taking to platforms such as a letter to local officials to start a manufactured pressure campaign.”
Despite its claims to the contrary, Eversource’s gas and electric divisions continue to enjoy rate recovery for past and current investments. Since 2018, Eversource’s electric division has been permitted to recover $300 million per year in new capital expenditures in addition to the recovery built into its base distribution rates.
In fact, neither division of Eversource has applied for a distribution rate case decision from PURA since 2018, meaning the company has threatened to reduce its budget and quality of service while still collecting the same revenues in rates.
“Anyone familiar with traditional utility ratemaking will confirm what your pocketbooks are already telling you: these utilities have enjoyed extraordinary rate relief for decades,” Senator Needleman said. “So much so that the legislature acted on a bipartisan basis through Public Act 23-102 to sunset Eversource’s $300 million slush fund effective with the date of its next rate case decision.”
Senator Needleman criticized the letter from Eversource executives as an attempt to undermine Connecticut’s efforts to force transparency and accountability on private corporations with monopolies and convince municipal leaders to support future rate increases in the name of “investments.”
However, utility companies are unlikely to scale back infrastructure investments, as these expenditures are recouped with substantial returns. Currently, the authorized return on equity stands at 9.25% for Eversource electric, and 9.10% for United Illuminating, providing significant financial incentives for such projects.
Senator Needleman encouraged municipal leaders to resist propaganda circulated by the utility companies with lobbyists and full-time employees dedicated to managing relationships with town leaders.
“When you get scary-sounding letters like the one earlier this week, ask yourself questions about the underlying motive and do a gut check,” Senator Needleman said. “Despite their recent insinuations that the walls are caving in financially, Connecticut utilities are still seeing record earnings, an 82% increase in the dividend payouts to shareholders over the past 10 years, and record salaries for top CEOs.”
