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On October 7, 2026 Connecticut Public Utilities Regulatory Authority (PURA) issued a final order adopting  a “framework” for “dynamic market purchases” to the state’s electric procurement plan for standard default service for customers at or under 500 kW aimed at lowering risk premiums.  Among other things, PURA approves direct purchases from the ISO-NE market by the utilities rather than purchases through wholesale suppliers.

From the Order’s Summary:

“Pursuant to Section 31 of Public Act No. 25-173, 1 the procurement manager (PM), in consultation with The United Illuminating Company (UI) , the Connecticut Light and Power Company d/b/a Eversource Energy (Eversource) (together, electric distribution companies, EDCs), the Office of Consumer Counsel (OCC), and the Commissioner of the Department of Energy and Environmental Protection (DEEP), developed and submitted to the Public Utilities Regulatory Authority (Authority or PURA) a proposed amendment (2026 Proposed Amendment) to the standard service power procurement plan (Procurement Plan).

Based on the 2026 Proposed Amendment and the record developed in this proceeding, the Authority approves a framework for dynamic market purchases. Specifically, PURA approves certain proposals contained in the 2026 Proposed Amendment (e.g., the 20% non-binding target, utilizing the lowest rejected Full Requirements Service bid as the proxy price, establishing a Planning Committee), approves other proposals with modifications (e.g., risk mitigation provision beyond the 20% target), and rejects or defers the remaining proposals, as discussed below.

The Authority directs the PM to revise the Procurement Plan in accordance with this Decision and to file the updated Procurement Plan. The Authority further directs each EDC to implement the Procurement Plan and to proceed diligently to implement dynamic market purchases at the earliest feasible procurement term. Reasonable and prudent costs incurred in developing and implementing dynamic market purchases are recoverable pursuant to General Statutes § 16-244m(b)(2) through the Generation Service Charge (GSC) and Bypassable Federally Mandated Congestion Charge (BFMCC) rate components of the Revenue Adjustment Mechanism (RAM), subject to separate tracking, documentation, and Authority review. No specific staffing, systems, consulting, operating, procurement, or carrying costs are preapproved in this Decision.”

Risk Mitigation Up to 20% Dynamic Market Purchases – Procurement Managers’ Proposal

“The Authority agrees with the PM’s determination that an explicit risk mitigation provision is unnecessary for dynamic market purchases comprising up to 20% of standard service load. As demonstrated by the PM’s referenced historical analysis, the largest modeled under-collection during the reviewed period is less than 0.57 cents per kWh. An impact of this magnitude is unlikely to materially influence customer migration between standard service and competitive retail supply. In a potential portfolio of standard service supplied 80% or more by FRS contracts and 20% or less by dynamic market purchases, the Authority finds the price risk to standard service customers associated with the dynamic market purchases to be sufficiently mitigated by the inherent portfolio composition. In this scenario the certain prices of the FRS contracts, a large majority proportion of the overall standard service portfolio, act as a hedge against the uncertain prices of dynamic market purchases. As the 2026 Proposed Amendment only contemplates supply through dynamic market purchases when to-be-determined criteria are met, shifting up to 20% of the risk to customers is a limit that mitigates risk with the known advanced pricing of FRS contracts. The Authority finds this balance of price risk reasonable.

Furthermore, the record in the instant proceeding establishes a clear distinction between spot-market purchases and active portfolio management. Active portfolio management requires materially greater staffing, expertise, forecasting, modeling, hedging, and ongoing risk-management capabilities. The record fails to demonstrate that acquiring or deploying these additional capabilities would be necessary or prudent solely to mitigate the risks associated with dynamic market purchases up to 20% of standard service load.

Accordingly, given the limited modeled historical reconciliation impacts, the inherent risk mitigation of the balance of FRS contracts in the supply portfolio, and the operational requirements and costs associated with active portfolio management, the Authority finds the PM’s recommendation supported and reasonable. The Authority approves the PM’s recommendation and directs that the Procurement Plan Amendment shall omit a separate risk mitigation provision for dynamic market purchases up to 20% of standard service load.”