{Updated at 9:40 p.m. with quote from United Illuminating.}
State utility regulators proposed a $30 million civil penalty — the maximum allowed by law — against Eversource on Thursday for failing to meet its obligations to ratepayers following Tropical Storm Isaias in August 2020.
The Public Utilities Regulatory Authority also proposed more than $2.1 million in penalties for United Illuminating for its performance following the storm.
Eversource must return $28.4 million of its $30 million penalty to ratepayers in the form of credits and also pay an additional $1.6 million fine to the state. UI must return $1.8 million to ratepayers and send $360,000 to the state.
These penalties, which the utilities can challenge in state Superior Court, would be in addition to other financial sanctions the authority imposed last week.
PURA did not issue statements about the penalties.
But state Attorney General William Tong praised the decisions.
“Eversource failed its customers and put Connecticut families at risk after Tropical Storm Isaias,” he said. “I fought for swift, severe penalties from the beginning, and this $30 million penalty is appropriate. Eversource must pay for their failures,” Tong said.
Eversource spokeswoman Tricia T. Modifica said, “We are reviewing the notice and look forward to getting through the final stages of the process. While our employees worked tirelessly to restore power as quickly as possible, we recognize the hardships our customers and communities experienced, and we acknowledge there are areas for improvement. We are working – and will continue to work – in good faith with our communities, customers and regulators to improve our performance.”
UI spokesman Ed Crowder said “We are reviewing the Notice of Violation and considering our next steps. We are disappointed PURA did not consider the facts we presented during the investigation. The facts show that we faithfully followed our Emergency Response Plan. We will continue to work with PURA to improve our preparation for and response to storms and other emergencies.”
The Aug. 4, 2020 storm affected more than 1.1 million customers, leaving some without power — amid a coronavirus pandemic and hot summer temperatures — for up to nine days.
The eight-month-long investigation considered more than 500 written public comments, including 46 sets of statements from public officials, with the overwhelming majority centered on monetary losses from spoiled refrigerator items and fuel for back-up generators.
Complaints also centered on customers and government officials being unable to reach Eversource — and to a lesser extent, UI — to report outages and downed wires or to get restoration updates.
Thursday’s penalties, if upheld in court, would be in addition to sanctions ordered on April 28, when the authority reduced the utilities’ abilities to recoup expenses from ratepayers — also because of how Eversource and UI responded to the tropical storm.
Regulators required Eversource to reduce its allowed rate of return on equity — a measure of profitability relative to assets and liabilities — for transmission costs by 0.9 percentage points.
PURA officials wrote in their decision that UI’s preparation for and response to the tropical storm “was markedly better than that of Eversource. The authority ultimately concluded that UI generally met the standards of acceptable performance” but failed to fully meet customers’ “reasonable expectations for managing a major storm event.”
UI must reduce its return by 0.1 percentage points.
The April 28 ruling also could cost the utilities millions of dollars, though it too can be appealed in Superior Court.
Tong added Thursday that “this matter is far from over. We will continue to fight before PURA to ensure that Eversource cannot put the full cost of their failures back on ratepayers.”
