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PURA Files Final Decision In Procedural Review Of Annual Rate Adjustment Mechanisms Of Eversource And Unitil
The Connecticut Public Utility Rate Authority (PURA) filed its final decision in the annual rate adjustment mechanisms of Connecticut Light and Power and United Illuminating company that addressed several issues, including treatment of non-hardship uncollectible expenses.
From Decision Summary:
[ *** ] The Public Utilities Regulatory Authority (PURA or Authority) examined process improvements for the annual reviews of the Rate Adjustment Mechanisms (RAM) of The Connecticut Light and Power Company d/b/a Eversource Energy (Eversource) and The United Illuminating Company (UI; together, with Eversource, the electric distribution companies or EDCs). Specifically, the Authority considered stakeholder input on forecasted Locational Marginal Prices (LMPs) and the effect of volatility on the net cost of Power Purchase Agreements (PPAs) as well as on the cost allocation methodologies for certain RAM components. As a result, the Authority identified certain filing requirements to facilitate resolution of these issues in each of the EDCs’ next annual RAM proceedings.
In future annual RAM reconciliation dockets, the Authority will consider both actual and forecasted LMPs when evaluating LMP volatility on the net costs of PPAs. Accordingly, the EDCs are directed to file relevant LMP information and calculations in those proceedings for the Authority to determine the appropriate Non-Bypassable Federally Mandated Congestion Charge (NBFMCC) rates. In addition, the Authority outlines a two-step analysis for considering interim rate adjustments necessitated by any significant LMP volatility.
Finally, the EDCs are directed to provide, in their next respective annual RAM proceeding, certain information and calculations to allow the Authority to assess potential future changes to the NBFMCC and SBC cost allocators, as discussed below, including the phasing in of any such changes over a reasonable period.
[ *** ] …the Authority used this proceeding to, in part, further explore disparities in the treatment of non-hardship (NHS) uncollectible expenses between the two EDCs. Eversource recovers NHS uncollectible expenses within its Generation Service Charge (GSC), NBFMCC, ESI, and base distribution rates. 2023 Eversource RAM Decision, p. 26. UI, on the other hand, allocates the NHS uncollectible expenses within its GSC, TAC, and base distribution rates. 2023 UI RAM Decision. While these divergent allocation approaches persist, any changes to the NHS uncollectible allocations are best implemented through each EDCs next base distribution rate case. A change made to the allocation methodology that would either reduce or increase the allocation of nonhardship uncollectible expenses to the GSC, outside of a traditional rate case, would cause the EDCs to either not recover the full expense or recover more than the actual expense. The non-hardship uncollectible expense within distribution rates remains static until final costs are determined during a new rate case, making a distribution rate case the most appropriate venue to address any allocation changes.
While the Authority does not seek to alter either EDC’s respective treatment of NHS uncollectible expenses outside of each EDC’s next respective rate case, the Authority desires further data on this issue in advance thereof. Accordingly, the EDCs are directed to include, in their respective next annual RAM proceeding, an additional alternate calculation23 for the treatment of NHS uncollectible expenses using the methodology referenced in Docket Nos. 07-01-01 and 08-07-04, which allocated NHS uncollectible expenses to the GSC mechanism and base distribution rates only. 24 See, Decision, January 28, 2008, Docket No. 07-07-01, Application of the Connecticut Light and Power Company to Amend its Rate Schedules, p.47; see also, Decision, February 4, 2009, Docket No. 08-07-04, Application of the United Illuminating Company to Amend its Rate Schedules, pp. 68, 71. [ *** ]
23 As with the NBFMCC, the request for an additional alternate calculation is not intended, and should not be construed as direction, to change the way in which the EDCs recover NHS uncollectible expenses. Rather, this requested filing is intended to assist the Authority in better understanding the implications of potential future allocations, which would be determined in each EDCs’ respective base distribution rate case.
24 The allocation of the NHS uncollectible expenses to the GSC is the proportion of GSC revenues compared to the total revenues reported by the company.
Decision (12/10/2025)
24-12-05 (12/11/2024)
(PURA Procedural Review of the Annual Rate Adjustment Mechanisms of The Connecticut Light and Power Company and The United Illuminating Company)
