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From PURA Annual Review Of The Rate Adjustment Mechanisms Of The Connecticut Light And Power Company

(Note:  An Identical Request For Comment was directed to The Illuminating Company)

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Pursuant to Conn. Gen. Stat. §§ 16-19b, 16-245g, and 16-245l, the Public Utilities Regulatory Authority (Authority or PURA) established the above-referenced docket to perform the annual review of the rate adjustment mechanisms (RAM) of The Connecticut Light and Power Company d/b/a Eversource Energy (Eversource or Company). The Authority is conducting this contested proceeding pursuant to Conn. Gen. Stat. §§ 16-11, 16-19b, 16-19e, 16-244r, 16-244t, 16-244v, 16-245g, 16-245l, and 16-262c for the purpose of (1) reviewing the Company’s proposed 2024 adjustments to its rate adjustment mechanisms and (2) reviewing the prudence of the actual costs associated with the 2023 rate adjustment mechanisms. The Authority will also consider modifications to the Company’s cost allocation methodologies and treatment of non-hardship uncollectible expenses. In addition, the Authority may adopt a standardized amortization methodology if a threshold level of over- or -under-recovery is reached in a given year. 

To facilitate the Authority’s review of the Company’s RAM, the Authority requests that Parties and Intervenors submit written comments on or before 4:00 p.m. on Wednesday, January 17, 2024, addressing the following topics:

1. In the August 16, 2023 Decision in Docket No. 23-01-03, PURA Annual Review of the Rate Adjustment Mechanisms of The Connecticut Light and Power Company Final Decision (2023 RAM Decision), the Authority began to review Eversource’s current RAM component cost allocation factors and methodologies for two primary reasons (Cost Allocation Objectives): (1) to conduct a comprehensive review of the Company’s cost allocation methodologies for their adherence to cost causation principles and other rate setting principles; and (2) to identify potential opportunities for improvement and standardization of cost allocation and rate design methodologies between the two electric distribution companies (EDCs). 2023 RAM Decision, pp. 27- 32. Provide comments regarding whether Eversource’s October 2, 2023, filings in compliance with Order Nos. 6, 7, and 8 of the 2023 RAM Decision would achieve the Cost Allocation Objectives, and if not, provide a detailed explanation and analysis of why not. In addition, provide recommendations on other methodologies not presented by the Company that might more effectively further the Cost Allocation Objectives, and include any other pertinent commentary on this topic. 
2. Provide comments regarding Eversource’s description of its methodology for allocating non-hardship uncollectible expenses to base rates, Generation Service Charge, Electric System Improvements charge, and Non-Bypassable Federally Mandated Congestion Charge, and the relationship among each of the rate components, in the Company’s October 2, 2023 filing in compliance with Order No. 9 from the 2023 RAM Decision, including whether the Party or Intervenor supports the current approach. Also provide recommendations on how to best align the methodologies used by the EDCs under a single methodology that is equitable to all ratepayers. Additionally, the Authority seeks comments on whether the Federal Energy Regulatory Commission allows for non-hardship uncollectible expenses to be recorded within the Transmission Adjustment Clause. 
3. In past RAM proceedings, the Authority acknowledged the variable impact of Power Purchase Agreements (PPAs) and other public policy contracts on the net expenses reported through the Non-Bypassable Federally Mandated Congestion Charge (NBFMCC), which in turn can impact the Company’s requested rate adjustment. For example, the Millstone PPA has presented both large over- and under-collections that have impacted the overall net costs reported in the NBFMCC in recent years. These contracts are affected by the Locational Marginal Prices (LMPs) of the wholesale energy market, since the contracts have a predetermined contracted rate. The difference between the LMPs, or market rates, and the contracted rates creates the variability of the large over- and under-collections on an annual basis. Accordingly, the Authority seeks comments regarding the standardization of a methodology that would help to achieve the desired objective of smoothing out the costs of market rate fluctuations impacting public policy contracts, and thereby reducing “rate shock” for ratepayers. Specifically, the Authority invites comments on if and what parameters should be used to determine when an over- or undercollection is substantial enough to create “rate shock” if incorporated into the NBFMCC rate effect subsequent to the Company’s March 1 RAM filing (i.e., typically May 1). The Authority also invites recommendations on how such large over- and under-collections should be handled, including whether stakeholders would recommend using the 31-month amortization approach authorized in the September 15, 2021 Decision in Docket No. 21-01-03, PURA Annual Review of the Rate Adjustment Mechanisms of The Connecticut Light and Power Company, and why or why not. Additionally, the Authority refers Parties and Intervenors to certain discovery related to this topic the Company provided in Docket No. 17-12-03RE10, PURA Investigation into Distribution System Planning of the Electric Distribution Companies – Building Blocks of Resource Adequacy and Clean Electric Supply (Distribution System Planning Docket).1 {***}

Notice Of Request For Written Comments  (The Connecticut Light And Power Company) (12/27/2023)
Notice, Of Request for Written Comments  (United Illuminating Company) (12/27/2023)
24-01-03 (10/02/2023)
See also:  24-01-04 (10/02/2023)