Utilities tell PURA PBR won’t work unless cost of capital on new plant is recoverable

Attorneys for Connecticut’s investor-owned electric companies told the Public Utilities Regulatory Authority (PURA) on Aug. 15 that the proposed Performance-Based Ratemaking framework will not induce utilities to waive their statutory right to file rate cases unless PURA allows recovery of the utilities’ cost of capital on incremental plant additions.

Eversource attorney Vincent Pace said the draft REO 1 decision’s treatment of the CT BAR mechanism — which, as drafted, permits recovery of depreciation, property tax and gross earnings tax on incremental plant additions but not the utility’s financing return — would “not be workable” for the companies and would drive more frequent rate cases rather than the four-year stability PBR intends to create. “Right now, the draft decision says for incremental plant additions, we're not allowed to recover a return,” Pace said. “We incur that real cost to finance those investments, and without that return, we can't commit to a 4 year stay out.”

Nut graf: The companies…