Following Eversource’s 2020 fumbles, state begins overhaul of energy billing

Eversource became the power company that Northwest Corner residents loved to hate in 2020, after the company fumbled in its response to several major storms — most notably Tropical Storm Isaias in August.

The power of the storm and an accompanying tornado knocked trees down throughout the region (and blew apart greenhouses at Paley’s Farm Market in Sharon), which shut down major roads for several days and also left some power company customers without electricity for several days.

Only a few days before the weather events, the power company had announced that it was seeking permission to increase rates from the state’s Public Utility  Regulatory Authority (PURA). 

During the storm, Eversource was criticized not only for not having enough workers on the ground to repair the damaged lines; but also for poorly communicating when power was likely to be restored.

Connecticut Gov. Ned Lamont and Attorney General William Tong chastised Eversource during the PURA hearing shortly after the storms, accusing the company of putting profits in the pockets of top executives while cutting back on workers on the ground. Anecdotally, power company workers in the Northwest Corner supported that criticism.

Eversource, meanwhile, blamed its purchase of the Millstone power plant on the increase in costs. The company also blamed hot summer weather for an increase in use that led to an increase in costs; an email sent out to Eversource customers in December similarly warned that a cold winter, with many people working from home and doing distance learning, could also increase electricity costs. 

The PURA initially approved the rate hike, but suspended it after customers said their electric bills dramatically increased, sometimes doubling. 

Meanwhile, PURA did a study of how customers ended up with such dramatically higher power rates last summer and part of what it discovered was that much of the Eversource billing process was based on estimates of power usage. 

The agency announced on Dec. 2 a major overhaul of how electric fees will be determined.

The PURA website explains that their “investigation determined that the current framework is problematic because it relies heavily on forecasts, which are inherently incorrect, and depending on the degree to which the forecasts are wrong — like in 2020 — can result in wild swings in a customer’s bill from one month to the next as the utilities essentially work to course correct the associated rates.”

PURA Chairman Marissa P. Gilett said in the announcement that the change should create more stability in billing: “The new process will rely on actual revenues and approved expenses from the previous calendar year as a proxy for expected costs when determining the going-forward rates, which will prevent the yo-yo effect that is witnessed when forecasts are dramatically off-base.”

The agency also found that Eversource was charging interest to customers because the power company was purchasing energy ahead of time based on estimates of what it thought the public would use: “The current process also compensates the utilities at, what PURA determined through this proceeding, to be an unjustifiably high rate (the weighted average cost of capital) for carrying charges associated with these expenditures.”

Eversource will no longer be able to decide its own interest rates; they will have to use the federal prime rate, which is generally several points lower than what the power company was charging. 

PURA is also beginning a redesign of Eversource bills, so that it’s easier for customers to see what they are actually paying.