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On September 11, 2026 a proposed final decision was issued in PURA’s review of power procurement plan amendment for standard service pursuant to Public Act 25-173.

“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. Each EDC may seek cost recovery of reasonable and prudent implementation costs through 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.”

Dynamic Market Purchases – Authority Analysis and Conclusion – “The PM’s proposed 20% non-binding target for dynamic market purchases is consistent with the applicable statutory mandates8 while retaining operational flexibility. The Authority agrees with OCC that the PM’s proposed target preserves the flexibility to respond to changing market conditions. Though the EDCs and CIEC recommend an initial target of 10%, the Authority finds that the non‑binding nature of the PM’s 20% target already permits selecting a 10% level when technical, economic, or market conditions, customer risk, or other relevant considerations support doing so. Additional tranches beyond a 20% non-binding target may also be selected when warranted. Adopting a binding target, while providing fixed procurement expectations, improperly forces dynamic market purchases even when FRS bids may provide greater customer value. In other words, CIEC’s and the EDCs’ preference for a lower initial level does not warrant rejection of the proposed 20% target. Accordingly, the Authority approves the PM’s proposed 20% non-binding target for dynamic market purchases.

“[W]ith input from the EDCs, OCC, and DEEP, the PM shall develop the initial methodology, decision criteria, and Procurement Plan Amendment language governing dynamic market purchases. The framework must identify the technical, economic, and market conditions under which dynamic market purchases may be exercised. Failed and partially failed solicitations, limited bidder participation, elevated bid dispersion, and material differences between FRS bids and relevant market indicators must be addressed. Additionally, objective metrics on bidder participation, bid dispersion, proxy-price comparisons, forward market prices, recently accepted bids, and other objective indicators may be incorporated into the framework. However, rigid thresholds should not displace the Procurement Teams’ and the PM’s professional judgment.

“The 20% non-binding target shall guide procurement planning and may be adjusted by the Planning Committees in accordance with the procedures included in the Procurement Plan Amendment, provided any adjustment is supported by applicable technical, economic, and market conditions. Additionally, a process for approving, documenting, and reporting deviations from the 20% target shall also be established. The PM shall submit as compliance a of the Procurement Plan demonstrating how the revisions approved in this Decision have been incorporated.”

“Finally, the Authority finds that the Planning Committees provide an appropriate forum for applying the dynamic market purchase framework established by this Decision. Therefore, each EDC shall establish a Planning Committee as provided in the Procurement Plan Amendment. As articulated in the Procurement Plan Amendment, during the annual meetings, each Planning Committee shall, at a minimum: 1) determine the non-binding target for dynamic market purchases, 2) establish or refine the method used to assess FRS bid competitiveness, 3) review the prior performance of dynamic market purchases, 4) discuss wholesale market price forecasts and relevant market reforms, 5) establish credit requirements associated with serving as a load-serving entity in ISO New England.”

Risk Mitigation Up to 20% Dynamic Market Purchases – Authority Analysis and Conclusion – “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. An impact of this magnitude is unlikely to materially influence customer migration between standard service and competitive retail suppliers. 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.

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.”

Risk Mitigation Beyond 20% Dynamic Market Purchases – Authority Analysis and Conclusion  – “General Statutes § 16-244m(b)(1) requires an established framework for evaluating and controlling risk, but does not mandate a financial or physical hedge whenever dynamic market purchases exceed a particular percentage. Consistent with that requirement, the Authority agrees with UI that the decision to serve more than 20% of standard service load through dynamic market purchases should not be made on an ad hoc basis or first determined on bid day. Dynamic market purchases above 20% are an authorized procurement option, not a procurement objective. The purchase should be considered only through an advanced, structured evaluation of whether prevailing conditions support a reasonable expected benefit to standard service customers.

“The PM shall develop the criteria for determining when it may be appropriate for dynamic purchases to exceed 20% in the Procurement Plan Amendment. At a minimum, the criteria shall address market prices and volatility, available FRS bids and supplier participation, projected reconciliation and migration impacts, proxy-price assumptions, customer rate effects, available financial and physical hedges, cost-allocation consequences, and operational feasibility.

The criteria shall guide the Planning Committee’s judgment and not operate as a mechanical checklist. Satisfaction of the criteria permits, but does not require, dynamic market purchases above 20% of standard service load. The Planning Committee shall determine that the expected customer benefits, after accounting for the resulting costs and risks, support any additional exposure. The determination and supporting analysis shall be documented before the applicable procurement period.

The advance review determines whether purchases above 20% may be considered. A separate determination is required regarding how the resulting exposure will be mitigated. For each proposed increment above 20%, the Planning Committee shall estimate the unmitigated exposure. The estimate shall include, but is not limited to, potential wholesale energy costs, reconciliation amounts, rate effects, and migration impacts. It must also address the working-capital, credit and collateral requirements associated with additional spot market purchases. The Planning Committee shall then evaluate whether the remaining FRS portfolio, a conservative proxy price, a financial or physical hedge, limits on volume or duration, or another available measure adequately controls that exposure.

The Authority does not find that purchases above 20% automatically require a financial or physical hedge. General Statutes § 16-244m(b)(1) requires acceptable risk parameters and guidelines for the use of financial contracts; it does not require that a financial contract be used in every instance. The proxy price may reduce the likelihood of significant over- or under-recoveries, but it does not eliminate wholesale price, migration, or load risk. The Planning Committee shall therefore determine whether additional mitigation is warranted and document the basis for using, or not using, a hedge.

If an additional financial or physical hedge is warranted, the Planning Committee shall evaluate reasonable available alternatives, including Nuclear PPAs, fixed-volume forward energy contracts, other standardized financial products, and physical supply products. This evaluation shall consider expected cost, risk-reduction value, load characteristics, implementation requirements, timing, and cost-allocation effects.

The Authority does not adopt a presumption that Nuclear PPAs must be used whenever dynamic purchases exceed 20%. Nuclear PPAs should be used only when their expected risk-reduction and customer benefits exceed their costs, implementation burdens, and cost-allocation concerns. Conversely, Nuclear PPAs should not be rejected solely because their costs and benefits are currently recovered from a broader group of customers. The relevant consideration is whether their use produces a reasonable overall result under the circumstances presented.”

“The Authority approves the following risk-mitigation provisions for dynamic market purchases above 20% of standard service load. The Planning Committee shall evaluate proposed dynamic market purchases above 20% in advance, quantify the incremental exposure, consider available mitigation measures, and select the measure or combination of measures that reasonably controls that exposure. The Planning Committee shall also determine whether the expected customer benefits outweigh the remaining costs and risks. If no available measure reduces the exposure to an acceptable level, the additional dynamic purchase above 20% of standard service load shall not be exercised.”

Mid-Period Reconciliation and True-Up Deadband – Authority Analysis and Conclusion – “The Authority does not approve a mid-period reconciliation mechanism at this time. The limited potential benefit outweighs the added complexity, customer confusion, and disruption to rate stability. Eversource explains that complete actual-cost information for the first three months of a six-month rate period would not be available until the fourth month. Eversource May Comments, p. 6. An interim adjustment would also rely on forecasts for the remainder of the period and would be delayed by the 45-day supplier notification requirement. The adjustment may therefore take effect too late to provide meaningful protection before the next regular rate change.”

“The Authority also does not approve the proposed plus-or-minus 0.5 cent per kWh deadband. Although the proposal is intended to reduce enrollment distortions, spreading amounts outside the deadband could prolong a mismatch between the standard service rate and current supply costs, thereby creating its own migration signals. It could also increase carrying costs, delay EDC cost recovery or customer credits, and produce a larger adjustment later. The existing six-month rate adjustment timeframe provides a predictable process for addressing cost differences while supporting rate stability and consistent customer enrollment. Accordingly, the Authority does not approve either a mid-period reconciliation mechanism or a deadband-based spreading mechanism.”

Proxy Price – Authority Analysis and Conclusion – “The Authority approves the PM’s recommendation to use the lowest rejected FRS bid from the final solicitation as the proxy price. As the next bid in the ranked bid stack after the accepted bids, the lowest rejected bid reasonably reflects the price of the FRS tranche displaced by the dynamic market purchase and provides a sound starting point for establishing the standard service rate. While a lower proxy may increase undercollections and a higher proxy may increase over-collections, neither result is inherently preferable. The proxy should reasonably reflect the applicable procurement while limiting material reconciliation balances in either direction. Using the lowest rejected bid helps reduce the risk that the standard service rate will materially understate the ultimate cost of serving that load. However, use of this proxy price-setting method should not establish a continuing preference for over-collection. Actual experience should be used by the PM and Planning Committee to determine whether the methodology reasonably balances the risks of over- and under-collection. Accordingly, the PM shall develop Procurement Plan Amendment language that establishes the lowest rejected bid from the final solicitation as the initial proxy-price methodology. The methodology shall also describe how the proxy will be applied when multiple tranches are served through dynamic market purchases.”

Timing Of Solicitations And Contract Duration – Authority Analysis and Conclusion – “ The Authority agrees with the PM that the record does not support changing the existing timing or frequency of FRS procurements. The Authority agrees with Eversource that soliciting supply further in advance or extending contract terms may increase supplier risk premiums, and importantly the costs accordingly passed on to customers in standard supply rates. As discussed in the Final Legislative Report, commitments of longer than six months may also reduce the ability of the standard service procurement process to respond to changing market conditions. The record does not establish that these potential costs are offset by greater price stability or other customer benefits.

The existing process nevertheless provides some flexibility through two six-month linked bids covering 12-month terms. As such, requiring separate prices for each six-month period preserves transparency and permits the Procurement Team to evaluate each delivery period independently. Accordingly, the Authority approves the PM recommendation to retain the existing timing and frequency of FRS procurements. Bidders may continue to submit bids covering terms longer than six months, provided that the price applicable to each six-month period is separately stated.”

Capacity, Recs, And Ancillary Service Costs – Authority Analysis and Conclusion – “The Authority agrees that no change to the treatment of capacity costs is warranted at this time. ISO New England’s proposed capacity auction reforms remain unresolved, and the final market design may affect how capacity costs are reflected in FRS bids and dynamic market purchases. The EDCs shall monitor the reforms, and the Authority will reassess the Procurement Plan after implementation, if warranted.

The Authority approves the use of environmental attributes available under existing PPAs to satisfy the RPS obligation associated with dynamic market purchases. Applying a market-based transfer price recognizes the value of those attributes while avoiding the costs of a separate market purchase.

If existing PPAs cannot fulfill the applicable obligation, supplemental attributes shall be obtained. The PM shall coordinate with the EDCs and oversee any supplemental requests for proposals or broker purchases. The PM shall approve supplemental purchases using a process comparable to the approval of FRS contracts. The EDCs shall register as LSEs for the portion of standard service load served through dynamic market purchases. Because ISO New England bills ancillary service costs directly to load serving entities, the EDCs shall recover those costs attributable to dynamic market purchases through SS rates.”

Implementation Timeline – Authority Analysis and Conclusion – “No further review and approval of the 2026 Proposed Amendment is necessary before the PM develops the final amendment language for the procurement plan. Nowhere in the statutory language regarding amendments to the procurement plan is a second proceeding required to approve specific language after the Authority reviews the PM’s proposal. General Statutes § § 16-244m(a)(2) provides that the Authority shall initiate an uncontested proceeding to review and modify or approve the 2026 Proposed Amendment. General Statutes § 16-244m(d), the subsection related to petitions from the PM to amend the procurement plan, directs the Authority to provide an opportunity for an uncontested proceeding and technical meeting regarding the proposed amendment, after which the Authority may approve, modify or deny the proposed amendment. General Statutes § 16-244m(f)(1), the subsection related to PURA’s authority to initiate a proceeding to amend the procurement plan, simply states that the Authority may initiate an uncontested proceeding to do so.”

“Implementation shall begin with the functions necessary to support the dynamic market purchase framework approved herein and the specific process of the Procurement Plan Amendment. Additional capabilities, including more complex hedging or portfolio management functions, shall be developed only when required by the Procurement Plan Amendment or supported by experience gained through implementation of dynamic market purchases. As such, the EDCs shall coordinate with the PM and OCC to establish implementation milestones, assess readiness, and identify the earliest feasible procurement term for each company. Within 45 days after the Procurement Plan Amendment is submitted to the Authority, the EDCs shall file their implementation plans with milestones, cost estimates, etc. as compliance in the instant proceeding.”

Cost Recovery – Authority Analysis and Conclusion – “The Authority approves the PM’s recommendation to permit the EDCs to seek recovery through RAM of reasonable and prudent costs incurred in developing and implementing dynamic market purchases. After all, the EDCs’ costs associated with implementing the existing standard service and last resort service procurement processes are currently recovered through the GSC and BFMCC rate components, which are reviewed annually in the RAM proceedings. Each EDC shall separately track the staffing, systems, consulting, procurement, and other implementation expenses associated with dynamic market purchases. When seeking cost recovery, each EDC shall submit these expenses with documentation sufficient to demonstrate that the costs were reasonably and prudently incurred and properly allocated. With respect to CIEC’s cost allocation concern, the costs of dynamic market purchases would be included in the existing GSC and BFMCC mechanisms and allocated according to the approved methodology for those existing mechanisms.

The Authority will review the nature, amount, timing, allocation, and prudence of each claimed expense when the EDC submits these expenses for recovery. The Authority reiterates that it does not approve any preliminary staffing estimates, operating-cost estimates, or other projected implementation expenses in this proceeding. The Authority also does not preapprove any associated carrying charges. Any request for carrying charges remains subject to review under the applicable RAM procedures.”