Connecticut’s two largest investor-owned utility companies raised alarms Monday over recently-filed legislation that seeks to impose dramatic new regulations on their businesses — including a requirement that they split apart their electric and gas interests. The legislation, Senate Bill 153 1, first appeared last week in the legislature’s Government Administration and Elections Committee and was quickly scheduled for a public hearing on Monday. In addition to prohibiting companies like Eversource and United Illuminating from owning both electric and gas utilities in Connecticut, the bill would limit their ability to profit from investments and it would make the companies and their internal documents subject to the state’s Freedom of Information Act. The bill would also add qualification requirements for new board members of the Public Utilities Regulatory Authority while attempting to limit conflicts of interest between regulators and the utilities. “It shouldn’t be that we have the second-highest electricity prices in the country,” said state Rep. Matt Blumenthal, D-Stamford, who serves as House chair of the Government Administration and Elections Committee and described the bill as his committee’s attempt to address widespread frustrations over the cost of utility bills. “These are massive corporate monopolies, they respond to shareholders and private investors, and it’s important that they not have too much power in our state, vis-à-vis the ratepayers,” he added. The provisions in the bill “come to us from a variety of sources,” Blumenthal said. “There have been a number of legislators who are very concerned about the current state of energy prices in the state and want to make sure that PURA and the Siting Council have the tools they need to protect Connecticut residents.” But the utilities and other business groups raised various objections to the legislation, questioning its constitutionality and calling it “short sighted” and “unnecessary.” In addition to their electric service utilities, both United Illuminating and Eversource own gas utilities that service hundreds of thousands of customers in Connecticut. In written testimony opposing the bill, lobbyists with United Illuminating argued that lawmakers provided no justification or rationale for forcing the company to split apart its businesses. They also warned of severe consequences under the bill’s proposal to cap the utilities’ rate of return at no more that the average of what it costs the utilities to finance their operations. As a result, the testimony read, “investment capital would flee Connecticut and flow to the readily available and significantly higher allowed returns provided in other states. “The [utilities] would be forced to curtail capital spending to maintain near term financial viability that would further delay capital investment and maintenance costs into the future and increase the threat of system degradation,” it went on. “None of these outcomes are good for Connecticut residents. A financially distressed utility is in no one’s best interest.” Eversource executives Doug Horton and Vincent P. Pace said in their own written testimony to the committee that the language in the bill was so problematic as to be “void on its face,” should it become law. “The Supreme Court has long held that utility companies have a constitutional right to have the opportunity to earn a return that is commensurate with returns for other comparable utility companies,” the executives wrote. Paul Amarone, a lobbyist for the Connecticut Business and Industry Association, also condemned the legislation in written testimony on Monday. “Policymakers must seek ways to reduce costs for ratepayers while encouraging investments in our grid,” Amarone wrote. “Unfortunately, many of the provisions in SB 1531 will do the opposite, raising costs for ratepayers and negatively impacting grid reliability.” None of the three current members of PURA’s board offered testimony on the bill, and officials at the agency could not be reached for comment on Monday. The path through the Government Administration and Elections Committee is unusual for a bill focused principally on electric utilities, which are normally the purview of the legislature’s Energy and Technology Committee. Leaders on that committee say they were not involved in the drafting of the bill, even as they continue to work on their own legislation addressing the state’s high cost of electricity, Senate Bill 4. “This is GAE doing their own thing,” said Energy and Technology Co-Chair Sen. Norm Needleman, D-Essex, using the abbreviation for Blumenthal’s committee. Blumenthal said Monday that the bill fell within his committee’s role of examining the “structure and processes of government,” including PURA. He added that the legislation is not intended to compete with other bills but to “augment” the work of his colleagues on Energy and Technology. “We’ve been coming at it, the problem, from slightly different angles,” Blumenthal said. “Our aim is to work cooperatively with that committee to come up with a product that is going to best benefit the citizens of Connecticut.” S.B. 1531 first gained attention late last week for certain provisions dealing with appointments to PURA, including one that would prevent anyone who served as the executive of a company that received a notice of violation from PURA from serving on the authority’s board. The section appeared to be aimed at the proposed nomination of state Sen. John Fonfara, D-Hartford, to a vacant seat on the authority. Fonfara’s ownership of a third-party electric supplier, which racked up more than $1 million in fines and late penalties from PURA, became public last month — shortly after Gov. Ned Lamont had announced plans to nominate the senator as part of a deal to secure the reappointment of the authority’s sitting leader, Marissa Gillett. Fonfara did not offer testimony on the bill Monday, and did not respond to a request for comment. The bill would also limit the number of PURA commissioners previously employed by entities regulated by the authority and extend the “cooling off” period for former commissioners to take a job with a regulated utility, from one year to five. Board members who previously worked for a utility — which would include interim Commissioner David Arconti, a former UI lobbyist — would be be required to recuse themselves from any cases involving their former employer for a period of five years. Blumenthal said the legislation was not directed at Fonfara or any other individual serving on PURA. A vote on whether to send S.B. 1531 to the Senate floor could come as early as Wednesday, Blumenthal said. ...read more read less