After a week of complaints, utility regulators temporarily pull plug on Eversource rate hike
After a tumultuous week filled with legislative outrage, sniping between energy companies, and consumer sticker shock at rising utility bills, state regulators on Friday announced they would temporarily suspend a controversial rate increase for energy company Eversource.
That rate increase went into effect on July 1 and was originally pitched to state regulators as relatively modest: about $5.50 on the average residential customer’s monthly bill.
But COVID-19 made that complicated. Stay-at-home orders drove people away from places of work, days got hotter, residential electricity usage spiked, and an economy-shattering pandemic left many cash-strapped customers reeling at bills compounded by Eversource’s rate increase.
By Friday morning, the utility began to acknowledge the strain.
“I think that our customers are really, really struggling,” said Penni Conner, chief customer officer for Eversource. “Many of them are struggling just to pay their rent, put food on the table. And these energy bills – the timing is just difficult.”
Just a few hours later, the Public Utilities Regulatory Authority, which had initially approved the rate hike, suspended Eversource’s rate increase and said it would investigate.
“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,” PURA officials wrote in a July 31 letter to Eversource.
“As an interim step, the Authority temporarily suspends its … approval and orders [Eversource] to immediately restore rates to those in effect as of June 30, 2020.”
A public hearing on the matter will be scheduled in August.
Eversource officials said they would go along with the decision.
“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,” wrote Eversource spokesperson Tricia Taskey Modifica in a statement Friday afternoon.
Right now, about 1 in 10 Eversource customers is behind on their bill, according to Conner.
She said the utility will work individually with customers who are struggling to pay for electricity. Conner said Eversource is offering payment plans or overdue balance forgiveness programs, which can gradually wipe away owed balances if customers make consecutive timely payments.
“We are really encouraging our customers to reach out,” Conner said.
The company is also suspending shutoffs, but she would not say how long that’s expected to last.
Initially, Eversource said the rate hike hinged on a state-mandated power purchase agreement with a major New England energy generator: the Millstone Power Station in Waterford.
But Millstone officials quickly pushed back against that assertion noting the 10-year contract with the nuclear plant was locked in at a rate that’s lower than Eversource’s standard offer.
On Thursday, James Daly, vice president of energy supply at Eversource, told Connecticut Public Radio subsidies to Millstone have helped drive up consumer costs. But he acknowledged that’s happened at a rate that was “relatively small in comparison” to overall spikes in residential demand due to a series of hot July days in the middle of the COVID-19 pandemic.
“The power we were delivered from Millstone was worth less than our fixed price contract with Millstone. So that really sparked people’s interest,” Daly said. “But, I think, in fairness, what got missed in that, is that underlying consumption was really the biggest driver.”
ISO New England, which manages the regional power grid, said Thursday electricity usage has gone up in recent weeks due to hot weather. But overall, the agency said power consumption is down during the pandemic, noting any increases in residential use have, on the whole, been offset by larger decreases in commercial and industrial use.
Politicians Friday afternoon were quick to praise PURA’s decision to suspend the rate increase.
“PURA’s pause today on delivery rate hikes reassures our residents that the reconsideration of requests by utilities can happen, and – most importantly of all – that customers won’t be overpaying in the meantime,” Gov. Ned Lamont said in a statement.
“This suspension of an absolutely abhorrent and unacceptable rate increase is a very welcome temporary fix,” said U.S. Senator Richard Blumenthal.
And state Attorney General William Tong said he’s gotten over 100 complaints so far.
“Consumers have a right to be angry,” Tong said in a statement. “We pay far too much for our energy as it is here in Connecticut. I thank PURA for reconsidering and scrutinizing these increases.”
62,000 customers get bogus scare
Making matters worse this week, Eversource said it mistakenly sent thousands of customers letters that were topped with an eye-catching message: “Reminder: We have not received your payment.”
That turned out to be wrong.
“There were 62,000 customers that were impacted by that,” said Conner, later noting the utility serves about 1.2 million customers in Connecticut. “We’ve been trying to be responsive and transparent with customers and gently reminding them of past due balance and all of the programs we have.”
“However, human error. We ended up with some customers in that file that shouldn’t have gotten in there,” Conner said. “I know that was hurtful to customers who received that. And I’m very sorry for the error.”
Conner, who spoke to Connecticut Public Radio Friday morning before PURA announced the temporary suspension, said Eversource was willing to work with state regulators if they put a pause on the rate hike.
“We are looking forward to the conversation,” Conners said. “This is complex and there are many interested parties.”
This story was first published July 31, 2020, by Connecticut Public Radio.
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