Aug. 3—The United Illuminating Co. notified Connecticut utility regulators this week it intends to seek an increase in electric rates of as much as much as 8 percent over a three-year period.
The Orange-based utility notified the Connecticut Public Utilities Regulatory Authority it intends to file its rate increase request within the next 60-to-90 days. If UI's request is approved by PURA, the new rates would begin showing up on customers' bills after September 2023.
The average UI residential customer, who uses 700 kilowatt hours of electricity per month and has a bill of $188, will see an increase of $9.69, according to Gage Frank, a company spokesman. UI serves about 341,000 customers in 17 communities in the Bridgeport and New Haven areas.
In a letter sent to PURA on Monday, UI President Frank Reynolds said by the time the proposed rate hike goes into effect, the utility "will have operated for nearly five years without a distribution rate increase."
"Moreover, based on an agreement approved by the Authority in June 2021, the Company reset its rates downward to effectuate the reduction of the federal corporate tax rate from 35 percent to 21 percent and agreed to return approximately $45 million dollars of tax liabilities to UI customers," Reynolds letter said in part.
Because of that agreement, he said "UI customers are paying less today for distribution service than they were when rates were approved in 2016."
But in responding to Reynolds' letter to PURA, Connecticut Attorney General William Tong and the state's Consumer Counsel Claire Coleman honed in on the impact the proposed increase would have on UI's customers. Tong said his office intends "to aggressively scrutinize every charge and assumption in search of savings,"
Coleman, whose office represents the interests of utility customers in rate heard by PURA, said volatility in global energy markets means that in addition to the rate increase that UI is requesting, the utility's customers are also paying at record high levels for the electricity that is being generated for their use.
UI is an electric distribution company and does not generate electricity. Customers either purchase it through a third-party provider or allow the UI to purchase the power for them through what is known as the "standard service offer."
Coleman said her office will scrutinize UI's rate hike request and "offer the Public Utilities Regulatory Authority an alternative that prioritizes the welfare of Connecticut ratepayers."
Frank said the company's cost of doing business has increased by 7 percent.
"Our goal in this rate case is to spread the proposed total rate increase over three years at an average total bill increase of approximately 5 percent per year across all rate classes, which represents an increase that is less than the current rate of inflation," he said.
The proposed rate hike, Frank said, "will enable UI to build a stronger, smarter and more resilient grid, focused on maintaining reliability and strengthening the resiliency of the system to meet customer needs and evolving expectations."
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