The Connecticut Public Utilities Regulatory Authority earlier this month issued its final decision regarding the performance of the state’s electric distribution companies and other public service companies in preparing for and responding to last fall’s two storms – Tropical Storm Irene and the October snow storm.
PURA released its draft decision on July 17, 2012. Parties to this matter – Docket Number 11-09-09 – then had the opportunity to file written comments on the draft and make oral arguments in front of PURA.
In the final decision (authored by PURA Chairman Arthur House and Vice-Chairman John W. Betkoski, III), PURA affirmed the conclusion that the state’s largest electric distribution company, Connecticut Light & Power (CL&P), was “deficient and inadequate” in several areas of its preparations and response to the two 2011 storms and the power outages they caused.
PURA further concluded that because the response to the storm by CL&P was deficient, an appropriate reduction of its allowed return on equity will be considered in its next ratemaking proceeding as a penalty for poor management performance and to provide incentives for improvement. In the decision, PURA also stated that it retains authority to consider storm response at the time CL&P seeks recovery for costs related to the 2011 storms. At the current time CL&P has no rate requests pending before PURA, nor has it submitted any request for recovery of storm-related costs.
The final decision provides an incentive for CL&P to strengthen its preparation for future storms, with PURA noting that it will “consider and weigh the extent to which CL&P has recognized its shortcomings and taken concrete, measurable steps to embrace the need for aggressive, extensive restructuring of both its attitude toward storm management and establishment of new practices for execution of future storm response.”
The final decision orders CL&P to develop a plan to establish a “heightened state of readiness” in preparation for future storms and to take steps to address issues such as tree trimming, communications and securing mutual assistance.
The PURA final decision did not specify potential sanctions for other public service companies, including United illuminating (UI), the state’s second largest electric distribution company. PURA did, however, reserve the right to take UI’s storm performance into consideration when reviewing any future request by that company for recovery of 2011 storm-related costs.
PURA also reviewed the impact of the 2011 storms on the providers of telecommunications services, cable television, gas, and water companies of Connecticut. While, overall, it was determined that these industries were less affected than the electric industry, and for the most part maintained adequate service during the overall outages, the Authority makes recommendations in this Decision and creates Orders to improve service reliability for future events.
Background on PURA’s Storm Review
In keeping with its regulatory responsibilities, PURA launched an initial investigation of the performance of Connecticut’s electric distribution companies and other public service companies – regulated gas, water and telecommunications companies – following Tropical Storm Irene and late expanded this review to include the October snow storm. A draft decision of PURA’s findings was released on July 17, 2012.
PURA has conducted detailed reviews of the performance of public service companies following major storms since Hurricane Gloria caused major power outages in 1985. These reviews include a review of:
- Emergency Planning
- Preparation for the specific storm
- Restoration Performance
- Plans for mutual assistance and supplemental staff
- Communications with customers and public officials
- Adoption of best practices and recommendations following previous storm events.
The PURA reviews are conducted under authority granted in Connecticut General Statutes § 16-11, which charges PURA with oversight of company equipment and operations in order to ensure safe, adequate and reliable service.
As part of its review of the performance of public service companies in last fall’s two storms, PURA requested documents from these companies, held public hearings where witnesses were cross examined, and analyzed consultants’ findings and legal briefs from respective parties.