Itai Vardi Connecticut utility United Illuminating, a subsidiary of Avangrid, is behind a political campaign targeting a draft decision by state regulators rejecting its requested rate hike. UI has mobilized its own employees to protest and write comments against the state’s Public Utility Regulatory Commission (PURA). Organizations that the utility supports financially have also submitted comments voicing concern over PURA’s decision, essentially advocating for their electric rates to increase in line with the utility’s request.
United Illuminating sells electricity to approximately 343,000 customers across 17 towns and cities in Fairfield and New Haven counties. It is owned by Avangrid, which itself is controlled by the Spanish energy giant, Iberdrola S.A.
In a draft decision from late last month, PURA rejected nearly all of UI’s request to increase its distribution rates by about 5 percent, for a total revenue increase of $130.7 million over the next three years. PURA stated it would allow less than a $2 million total increase. Connecticut customers pay some of the highest utility bills in the country.
PURA’s draft decision also rejected UI’s requested 10.20 percent return on equity, ruling that 8.80 percent is more appropriate. PURA noted that the company is financially stable and the reduced ROE, which will not affect the company’s credit ratings, is thus “reasonable and sufficient for the Company and provides the proper balance between shareholders and ratepayers.” The decision further reduced the allowed ROE to 8.28 percent, subject to certain conditions and a timeline to address performance and management issues.
Among a myriad of issues, PURA cited UI’s failure to remediate the shuttered English power station in New Haven, and various customer service deficiencies.
PURA’s draft decision, which will be finalized by August 25th, has received broad support from key state officials, including Connecticut’s Attorney General, William Tong, the head of the Office of Consumer Council, Claire Coleman, and state lawmakers. In a press conference this week, officials reiterated support for PURA’s approach to hold utilities accountable and criticized the utilities’ “ongoing public relations” campaign.
Company-Written Comments
Prior to a contentious hearing on the draft decision earlier this month, United Illuminating officials and employees staged a rally near the entrance to PURA’s headquarters, with more than 150 workers wearing orange T-shirts with UI’s logo.
Additionally, an Energy and Policy’s Institute’s review of comments filed with PURA in the past two weeks shows that a number of UI employees submitted comments opposing the draft decision. They addressed the comments to Governor Ned Lamont as well as to PURA. Citing a number of ways they claim the decision harms the company, the comments ended on an ominous note: “If Connecticut suffers the consequences of these policies, it will not be UI to blame, but PURA.”
Nearly all the language in the comments was identical or similar, suggesting the comments were provided to the employees in boilerplate form. Document metadata on several of the comments showed that they were authored by Sarah Wall, a member of UI’s State Government Relations team and a registered lobbyist for the company in Connecticut.
Avangrid reported a profit of $881 million in 2022, an increase of nearly 25 percent from 2021.
Avangrid’s CEO, Pedro Azagra Blázquez, who joined the company in March last year, earned $4,849,985 in 2022. The ratio of the company’s CEO compensation to the total compensation of Avangrid’s median employee was 62:1.
Charitable Organizations Mobilized
A review by the Energy and Policy Institute found that a number of charitable organizations provided comments in support of UI, asking Governor Lamont and PURA to “moderate” the draft decision. Language in these letters is identical or similar, again suggesting UI provided templates. All letters acknowledge that the organizations receive financial support from UI. They include letters from New Haven Promise, Homes for the Brave, Bridgeport Rescue Mission, and New Haven Symphony Orchestra, Long Wharf Theatre, and Habitat for Humanity.
A review of Avangrid Foundation’s tax forms shows that the company donated $405,000 to Habitat for Humanity International since 2020.
Earlier this year, the New Haven Symphony Orchestra opposed a bill prohibiting utilities’ use of ratepayer money to fund political activities, and advancing other policies that would tie Connecticut utilities’ profitability to their performance at serving customers
As a report by the Energy and Policy Institute has found, utilities throughout the country often use donations to charitable organizations as a means to encourage organizations to support their political agenda, including rate increases and higher profit margins that come at customers’ expense.
