Connecticut Regulators Cut More Than $500 Million From Eversource Storm-Cost Recovery

Connecticut regulators on Wednesday approved $861 million for Eversource Energy’s response to catastrophic storms from 2018 through 2023, while rejecting more than $500 million of the company’s request.

The Public Utilities Regulatory Authority voted unanimously on July 29 to issue its final decision in the storm-cost case. The ruling allows Eversource to pursue long-term bond financing for much of the approved amount, a step intended to spread repayment over time and reduce the immediate pressure on electric bills.

The decision does not eliminate storm-related charges. It determines how much of the utility’s documented costs can be recovered from customers and how that recovery will be financed.

Nearly $400 million in retrospective interest rejected

The largest reduction came from PURA’s decision to deny nearly $400 million in retrospective interest, also called carrying charges. Eversource had sought interest on storm expenses incurred before the regulator completed its review of whether those costs were reasonable and properly supported.

PURA rejected that request for the period before the final decision. Interest may begin accruing on eligible costs after the decision was issued, according to the case record.

The Office of the Attorney General had argued that ratepayers should not be charged interest on costs that had not yet been reviewed and approved. Attorney General William Tong also challenged other expenses that he said lacked adequate support or reflected imprudent spending.

What PURA cut from the request

Eversource originally sought roughly $1.28 billion in storm recovery, including interest and other charges. PURA’s final decision reduced the request by more than $500 million.

In addition to rejecting retrospective interest, the regulator adjusted or disallowed costs tied to storm eligibility, vendor oversight, excessive food and lodging expenses, duplicative recovery and private-plane travel used to move workers for one 2023 storm.

Those findings are regulatory decisions about whether costs may be passed on to customers. They do not establish criminal conduct or fraud.

The storms covered by the proceeding were treated as catastrophic events because each exceeded the applicable $4 million threshold for separate review. Routine storm costs are included in normal utility rates and were not the subject of this decision.

Why the approved amount is different from the bond-financed amount

The $861 million approved by PURA is the total recovery authorized in the proceeding. The amount expected to move into long-term rate-reduction bonds is approximately $668 million.

That lower figure reflects about $191 million already included in existing rates, along with mutual-aid payments from other utilities and related adjustments. In other words, the securitization amount is not a replacement for the $861 million approval. It is the portion expected to be financed through bonds after amounts already recovered or credited are counted.

Securitization allows a utility to recover approved costs through bonds repaid over a longer period. The approach can reduce the size of near-term bill increases, but it also extends repayment and creates financing costs over time.

Eversource has estimated that securitization could reduce the monthly bill impact by $6 to $7 compared with recovering the costs over a shorter period. That is a company estimate, not a guaranteed savings figure or a final amount that every customer will see. Individual bills will vary based on usage, rate class and the timing of implementation.

A separate Eversource rate case remains pending

The storm-cost decision is separate from Eversource’s request for an approximately 11% increase in base distribution rates beginning in 2027.

PURA is still reviewing that distribution-rate case. Base distribution rates cover the utility’s delivery system and related operations, while storm-cost recovery addresses expenses from the specific catastrophic events reviewed in Docket No. 25-12-13.

The two proceedings could affect customers during similar time periods, but they are not the same request. The final effect on bills will depend on PURA’s separate rate-case decision, the bond-financing process and when approved charges begin appearing on bills.

What Connecticut residents should watch next

The next steps include authorization and implementation of the long-term bonds, final decisions about how the securitized charges will appear on customer bills and continued review of Eversource’s proposed 2027 distribution rates.

The Office of Consumer Counsel had urged PURA to cut the company’s request more deeply, citing unsupported invoices, excessive staffing and vendor costs, storm eligibility concerns and weak oversight. PURA adopted some of those adjustments while approving most of the underlying storm-response costs, excluding the rejected interest.

For residents, the practical takeaway is mixed: regulators rejected hundreds of millions of dollars that Eversource sought to charge to customers, but they also approved substantial recovery. The timing and size of the eventual bill impact will not be clear until the financing and separate rate proceedings move forward.

Sources

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