CT regulators issue a scathing critique of Eversource's efforts to restore power after Isaias

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Connecticut utility regulators on Wednesday issued a final ruling that offered a scathing critique of the performance of Eversource Energy in its efforts to restore power to customers following Tropical Storm Isaias last August.

Commissioners with Connecticut’s Public Utilities Regulatory Authority voted 3-0 in a ruling that found Eversource did not “meet certain acceptable performance standards in preparing for, and responding to, Tropical Storm Isaias.”

PURA members were also critical of the state’s other large electric distribution company, Orange-based United Illuminating, but reserved most of their ire for Eversource, which has dual headquarters in Hartford and Boston.

The Aug. 4, 2020 storm left over 1 million residents and businesses without power for an extended period in the midst of a global pandemic and a summer heat wave.

Marissa Gillett, PURA’s chairwoman, said regulators will consider monetary penalties against the two utilities in a separate proceeding that will take place this summer. The goal, according to PURA officials, is to have a ruling regarding the monetary penalties by the end of July.

But Wednesday’s ruling included a reduction in the rate of return that the two utilities can recoup from ratepayers going forward, although an estimate of how much that translates into dollars in cents was not immediately available.

“This company was operating as a corporation and not as a public utility, with responsibilities to the people it serves,” Gillett said prior to the vote. “They have much more than a public image issue on their hands.”

Reaction to the PURA ruling from Connecticut public officials and groups representing various groups of customers of the electric utilities was swift and supportive of the action by regulators.

Gov. Ned Lamont said the ruling shows that “accountability is critical for all ratepayers across our state, and that is what is happening now.”

State Rep. David Arconti, D-Danbury, the House Chair of the General Assembly’s Energy and Technology Committee, called PURA’s ruling “a validation of what customers and elected officials have been saying all along,” that the two electric distribution companies failed to inform customers, to allocate the necessary emergency resources and to protect public safety.

“We all suffered the consequences of their poor storm response and deserve better,” Arconti said. “It is time for utility companies to reciprocate and deliver reliable services.”

Connecticut Attorney General William Tong offered a more pointed assessment on Wednesday of the ruling, saying it showed “Eversource failed and must regain our trust.”

“Their failed response to Isaias put lives in danger, and left families in the dark and disconnected during a deadly pandemic,” Tong said.

The ruling came just weeks after Eversource announced that Joe Nolan would replace CEO Jim Judge, who will remain executive chairman of the board of directors.

The move to replace Judge with Nolan was viewed by some as an effort to appease Connecticut lawmakers and PURA officials. But Gillett said the decision to replace Judge, who declined to participate in the hearings associated with the investigation, had no impact on the final ruling.

While defending the utility’s Isaias response, Judge agreed that Eversource came up short in some areas, including maintaining lines of communication with customers and municipal leaders. In February, Judge told investment analysts that Eversource would seek to recoup some $230 million in Isaias costs from ratepayers, drawing additional criticism.

Nolan, Judge’s replacement, previously told Hearst Connecticut Media that Eversource has an “image problem” in Connecticut. “We tried to do everything we could to prepare for the storm, but I know we let some people down, and I’m sorry about that,” Nolan said. “We’ve done some soul searching about what we did and how we can do better.”

Caroline Pretyman, an Eversource spokesperson, said the company stands by its response to the storm.

“We know our thousands of employees showed skill and dedication in restoring power to customers as quickly as possible,” Pretyman said. “There are many areas for improvement that we are already addressing and we continue to work in good faith with our communities, customers and regulators to improve our performance. Today’s decision deserves careful consideration and review and we are committed to moving forward in the best interest of our customers.”

Ed Crowder, a spokesman for UI, said that while officials at the utility are still reviewing the decision, “we are disappointed that the ruling does not fully reflect the facts we presented during the proceeding, and that it imposes a penalty despite PURA’s finding that UI generally met the standards of acceptable performance and conducted itself prudently and efficiently.”

“We are mindful of the deficiencies cited by PURA, and are well aware of the difficulties that extended outages cause for our customers,” Crowder said.

The PURA investigation determined that UI’s response was significantly better than that of Eversource. But regulators said that while UI secured and deployed adequate line crews for the event, the company failed to adequately coordinate with public safety officials and failed to meet its obligations in responding to the highest priority calls.

In addition to launching a proceeding to consider fining the two utilities and reducing their rates of return, PURA also ordered a comprehensive management audit conducted by a third party into operations by Eversource and UI.

That management audit will also include Eversource’s natural gas operations as well as its water company, Bridgeport-based Aquarion, according to Gillett. UI’s natural gas companies will also be subject to that audit.

Gillett’s fellow PURA commissioners, John Betkoski and Michael Caron, said the ruling in no way denigrates the hard work done by repair crews following the storm.

“It pains me that once again during my long tenure as a PURA commissioner, I am sitting in judgment of our electric utilities’ response to a tropical storm,” said Betkoski, who joined the regulatory agency in 1997, when it was known as the Department of Public Utility Control.

Caron said when Eversource ratepayers needed the company’s leadership team to perform at a high level, they came up short.

“When it comes to ‘showtime’ and the spotlight goes on, Eversource proceeds to cower in the corner,” he said. “Worse, decade after decade it is always the same usual suspects: lack of preparedness, lack of communication, lack of coordination and a lack of timely restoration.”

Gillett said that PURA had previously reduced Eversource’s rate of return once before during the previous decade for its mishandling of storms in 2011.

“Evidently, we didn’t reduce it enough to get their attention and keep this from happening again,” she said. “Either that, or they just forgot.”

Betkoski said PURA’s findings and recommendations “provide a path forward for our utility companies to respond to significant outages in a prompt, safe and timely manner in the future.”

The ruling came after an monthslong investigation into how the utilities performed as they scrambled to restore power.

Gillett said the utilities have the right to lauch a court appeal in response to the PURA ruling, but said she and her follow commissioners are confident in the fairness and thorough nature of their ruling.

“The ball is in their court right now,” Gillett said.

This article contains additional reporting by Alexander Soule and Clare Dignan.

luther.turmelle@hearstmediact.com