Conn. Senate passes bill to create more oversight of utility companies

HARTFORD -- The state Senate early Friday approved legislation aimed at providing more oversight of the state's electric utilities and increasing protections for consumers that was one of the top legislative priorities this year of both the Democratic majority and minority Republicans.

The bill, which builds on 2020 legislation in the wake of massive statewide outages from Tropical Storm Isaias, passed in a unanimous 35-0 vote after an hour-long debate.

It next heads to the House of Representatives. If approved there before the June 7 legislative deadline and signed into law by Gov. Ned Lamont, utilities including United Illuminating and Eversource would be prohibited from passing on to consumers the costs of applying for rate increases, marketing their products, lobbying and membership in professional organizations.

It would also emulate 16 states and establish a fund for ratepayers to oppose rate-increases proposals, and according to legislative proponents, create a tougher regulatory structure overseeing state utilities.

"Public utilities do not operate in a free market," said Sen. Norm Needleman, D-Essex, co-chairman of the legislative Energy & Technology Committee, when debate started shortly before midnight Thursday night. "They have every right to make a profit but they have found a way to make a lot of money." He noted that in February, Eversource announced record profits of $1.4 billion in 2022, even as it was sharply raising electric rates.

"These profits are not made from competing with other private companies to provide the products and services," he said. "They are earned from our constituents who have no other choice in the market for a vital service. Let's prioritize the interests of millions of rate payers. They deserve reliable electricity at a fair price and utilities that are responsive to the needs of their rate payers. There are many, many event and organizations that are utility-sponsored and I applaud their efforts. We just want to make sure those efforts are not recovered on the backs of rate payers."

The bipartisan bill, which includes a tactic called decoupling, would also separate utilities' revenue from the needs of customers, setting up better oversight by establishing key metrics, including renewable sources, energy efficiency and customer satisfaction.

"In the winter, when residents of Connecticut saw a startling rise in their energy bills, it was important for this state government to act," said Sen. Ryan Fazio of Greenwich, a top Republican on the Energy Committee. "Of course we see market fluctuations in the cost of electricity all the time, but we know that Connecticut's rates are too high, And we know that our residents are not satisfied with the level of service that they're receiving from the utilities that serve them. We need to put consumers first and we need a long-term strategy for reducing rates and improving the reliability of our grid."

Customer bills would be revised to better inform ratepayers.

"We need an all-the-above clean energy strategy in our state that incorporates wind and solar and hydro and nuclear and geothermal and everything that we have at our disposal to meet our environmental goals, but also to ensure that we have a reliable grid and that we have the lowest costs possible for consumers, for the working class, for the middle class, for small businesses in our state," Fazio said. "This is positive bill. This is the correct first step and this is the product of bipartisan policy making."

Senate Minority Leader Kevin Kelly, R-Stratford, agreed, recalling that when the legislative session began in January, the issues of utility transparency, energy costs and service was a priority for both Republicans and Democrats. "I think this is a positive step forward, one that will reduce the costs for the homeowners across Connecticut," Kelly said.

"These cases that are associated with rate proceedings, including the cost of attending and preparing for the hearings, really should be paid by the shareholders' profits to level the playing field and not by the rate payers," Senate President Pro Tempore Martin Looney, D-New Haven.

Senate Majority Leader Bob Duff, D-Norwalk, a former co-chairman of the Energy Committee, said the legislation is part of an long-term, incremental attempt to hold utilities more accountable.

"We have all been in so many storms and so many times where we are frustrated by events that occur, natural events and responses as well, and doing what we can in this legislature to act on our constituents who have spoken so loudly and clearly about the issues that frustrate them on energy issues in Connecticut," Duff said. "It has been a frustrating time because when we have thought we have made good improvements, sometimes it has not been enough. We have a regulated monopoly that is a public company that is also multi-state, which makes it very difficult for a legislative body in one state to have truly the impact that we want to have."