Connecticut Helping Lead Effort To Reduce Energy Utility Corporate Greed

By Joe O’Leary

December 20 @ 5:00 am

A recent report from the Energy and Policy Institute found that Connecticut is leading a national effort to rein utility providers utilizing their customer revenue to fund questionable expenses — a practice most prominent among electricity providers.

The institute’s report found that even as regulators around the United States approved more than twice as many electric rate increases in 2023 compared to 2022, significant slices of resulting revenue are supporting everything from lobbying and advertising efforts to the gold-star treatment of executives.

The institute compared those circumstances to growing financial strain on the American people, reflected in a U.S. Census report finding as many as one in four households struggle to pay their electricity bills.

There’s a long, frustrating history of gas companies charging customers for work they’re performing in their own best interests. California’s SoCalGas tried to charge customers for lobbying and public affairs costs; Virginia’s Dominion Energy did a similar thing, trying to get $5.3 million in lobbying expenses from customers.

While a federal law limited the amounts utilities could charge customers for advertising, and states have tried to strengthen similar laws, the Energy and Policy Institute found numerous companies spending tens of millions on such ads, highlighting where advertising bleeds into public relations and self-promotion.

Further, in examples of overzealous spending, Indiana’s Duke Energy spent more than $5 million in ratepayer funds on executives’ private jet trips in the 2020s, Dominion South Carolina tried to pull nearly $1 million from ratepayers to cover memberships at golf courses, and Nevada’s Southwest Gas tried to collect ratepayer funds to cover employee massages.

However, states are working to counter and limit these expenses, with Connecticut one of three states passing legislation in 2023 directly targeting their use.

In Senate Bill 7, spearheaded by Senate Democrats and passed into law after development in the Energy & Technology Committee, Connecticut lawmakers prevented companies from using ratepayer funds for expenses like membership in business or industry associations, lobbying activity, marketing and advertising. Other prohibited expenses included corporate executives’ entertainment and travel costs.

Under the law, companies cannot use ratepayer funds to support rate proceedings, and must provide the Public Utilities Regulatory Authority with lists of costs related to these items.

These bills are bearing fruit. The report found that PURA disallowed more than $500,000 in prohibited costs from a gas rate case brought by Connecticut natural gas provider Avangrid. Preliminary reports also found these policies cut back more than $600,000 of spending from Eversource and Avangrid just in late 2023. Similarly, in Colorado, a rate case led to more than $750,000 in costs being stripped from a proposal by Xcel Energy directly related to that state’s law.

WFSB reported in November 2024 that PURA denied more than $617,000 in requested funds that were specifically prevented by Senate Bill 7’s provisions.

“In a complicated energy marketplace, this kind of spending is over-the-top, adding to the pressure faced by many households and contributing to high power bills,” said Sen. Norm Needleman, the Connecticut Senate Chair of the Energy and Technology Committee. “In 2023, legislators took action to limit these kinds of expenses in Connecticut, and it’s rewarding to know the law has made a difference in the short time since its passage.”