(a) In the exercise of its powers under the provisions of this title, the Public Utilities Regulatory Authority shall examine and regulate the transfer of existing assets and franchises, the expansion of the plant and equipment of existing public service companies, the operations and internal workings of public service companies and the establishment of the level and structure of rates in accordance with the following principles: (1) That there is a clear public need for the service being proposed or provided; (2) that the public service company shall be fully competent to provide efficient and adequate service to the public in that such company is technically, financially and managerially expert and efficient; (3) that the authority and all public service companies shall perform all of their respective public responsibilities with economy, efficiency and care for public safety and energy security, and so as to promote economic development within the state with consideration for energy and water conservation, energy efficiency and the development and utilization of renewable sources of energy and for the prudent management of the natural environment; (4) that the level and structure of rates be sufficient, but no more than sufficient, to allow public service companies to cover their operating costs including, but not limited to, appropriate staffing levels, and capital costs, to attract needed capital and to maintain their financial integrity, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable which shall include, but not be limited to, reasonable costs of security of assets, facilities and equipment that are incurred solely for the purpose of responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism; (5) that the level and structure of rates charged customers shall reflect prudent and efficient management of the franchise operation; and (6) that the rates, charges, conditions of service and categories of service of the companies not discriminate against customers which utilize renewable energy sources or cogeneration technology to meet a portion of their energy requirements.

(b) The Public Utilities Regulatory Authority shall promptly undertake a separate, general investigation of, and shall hold at least one public hearing on new pricing principles and rate structures for electric distribution companies and for gas companies to consider, without limitation, long run incremental cost of marginal cost pricing, peak load or time of day pricing and proposals for optimizing the utilization of energy and restraining its wasteful use and encouraging energy conservation, and any other matter with respect to pricing principles and rate structures as the authority shall deem appropriate. The authority shall determine whether existing or future rate structures place an undue burden upon those persons of poverty status and shall make such adjustment in the rate structure as is necessary or desirable to take account of their indigency. The authority shall require the utilization of such new principles and structures to the extent that the authority determines that their implementation is in the public interest, as identified by the Department of Energy and Environmental Protection in the Integrated Resources Plan and the Comprehensive Energy Strategy, and necessary or desirable to accomplish the purposes of this provision without being unfair or discriminatory or unduly burdensome or disruptive to any group or class of customers, and determines that such principles and structures are capable of yielding required revenues. In reviewing the rates and rate structures of electric and gas companies, the authority shall be guided by the goals of the Department of Energy and Environmental Protection, as described in section 22a-2d, the Comprehensive Energy Strategy, the Integrated Resources Plan and the Conservation and Load Management Plan. The authority shall issue its initial findings on such investigation by December 1, 1976, and its final findings and order by June 1, 1977; provided that after such final findings and order are issued, the authority shall at least once every two years undertake such further investigations as it deems appropriate with respect to new developments or desirable modifications in pricing principles and rate structures and, after holding at least one public hearing thereon, shall issue its findings and order thereon.

(c) The Department of Energy and Environmental Protection shall coordinate and integrate its actions, decisions and policies pertaining to gas and electric distribution companies, so far as possible, with the actions, decisions and policies of other agencies and instrumentalities in order to further the development and optimum use of the state's energy resources and conform to the greatest practicable extent with the state energy policy as stated in section 16a-35k, the Comprehensive Energy Strategy and the Integrated Resources Plan taking into account prudent management of the natural environment and continued promotion of economic development within the state. The department shall defer, as appropriate, to any actions taken by other agencies and instrumentalities on matters within their respective jurisdictions.

(d) The Commissioner of Energy and Environmental Protection, the Commissioner of Economic and Community Development, and the Connecticut Siting Council may be made parties to each proceeding on a rate amendment proposed by a gas or electric distribution company and shall participate in such proceedings to the extent necessary.

(e) The Public Utilities Regulatory Authority, in a proceeding on a rate amendment proposed by an electric distribution company based upon an alleged need for increased revenues to finance an expansion of the capacity of its electric distribution system, shall determine whether demand-side management would be more cost-effective in meeting any demand for electricity for which the increase in capacity is proposed.

(f) The provisions of this section shall not apply to the regulation of a telecommunications service which is a competitive service, as defined in section 16-247a, or to a telecommunications service to which an approved plan for an alternative form of regulation applies, pursuant to section 16-247k.

(g) The authority may, upon application of any gas or electric public service company, which has, as part of its existing rate plan, an earnings sharing mechanism, modify such rate plan to allow the gas or electric public service company, after a hearing that is conducted as a contested case, in accordance with chapter 54, to include in its rates the reasonable costs of security of assets, facilities, and equipment, both existing and foreseeable, that are incurred solely for the purpose of responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism.

(P.A. 75-486, S. 5, 69; P.A. 77-614, S. 19, 162, 284, 587, 610; P.A. 78-303, S. 85, 136; P.A. 79-449, S. 4, 7; P.A. 80-482, S. 59, 348; P.A. 81-439, S. 7, 14; P.A. 86-187, S. 5, 10; P.A. 87-202, S. 2; P.A. 94-83, S. 13, 16; P.A. 95-250, S. 1; P.A. 96-211, S. 1, 5, 6; P.A. 98-28, S. 52, 117; P.A. 02-94, S. 1, 2; P.A. 07-242, S. 7; P.A. 11-80, S. 1, 27; P.A. 13-298, S. 10; P.A. 14-134, S. 57.)

History: P.A. 77-614 and P.A. 78-303 replaced “Connecticut energy agency”, i.e. department of planning and energy policy, with office of policy and management and, effective January 1, 1979, replaced public utilities control authority with division of public utility control within the department of business regulation and commissioner of commerce with commissioner of economic development; P.A. 79-449 required conformity “to the greatest practicable extent with the state energy policy” in Subsec. (c); P.A. 80-482 made division an independent department and deleted reference to abolished department of business regulation; P.A. 81-439 amended principles to include energy efficiency and development and utilization of renewable energy and to prohibit discrimination against users of renewable energy sources or cogeneration technology; P.A. 86-187 replaced power facility evaluation council with Connecticut siting council in Subsecs. (c) and (d); P.A. 87-202 amended Subsec. (a) principles to include water conservation; P.A. 94-83 added new Subsec. (e) re applicability to telecommunications service which is competitive or to which an approved plan for an alternative form of regulation applies, effective July 1, 1994; P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development with Commissioner and Department of Economic and Community Development; P.A. 98-28 amended Subsec. (d) by adding electric distribution companies, added new Subsec. (e) requiring consideration of demand-side management for electric distribution companies and redesignated former Subsec. (e) as Subsec. (f), effective July 1, 1998; P.A. 02-94 amended Subsec. (a)(4) by adding provisions to include reasonable costs of security associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism, made a technical change in Subsec. (a)(5) and added Subsec. (g) to allow the department to modify a rate plan with an earnings sharing mechanism to include such security costs; P.A. 07-242 amended Subsec. (a)(3) to add care for energy security and Subsec. (a)(4) to include appropriate staffing levels as part of operating costs; P.A. 11-80 amended Subsecs. (a), (b), (e) and (g) by replacing “Department of Public Utility Control” with “Public Utilities Regulatory Authority” and replacing “department” with “authority”, amended Subsec. (c) by replacing “Department of Public Utility Control” with “Department of Energy and Environmental Protection”, deleting requirement for department to consult with Commissioner of Environmental Protection, Connecticut Siting Council and Office of Policy and Management to coordinate and integrate its actions and deleting requirement that department consider the energy policies of the state, and amended Subsec. (d) by replacing “Commissioner of Environmental Protection” with “Commissioner of Energy and Environmental Protection”, changing “shall” to “may” re commissioner and Connecticut Siting Council being parties to each proceeding and removing Office of Policy and Management from list of parties, effective July 1, 2011; P.A. 13-298 amended Subsecs. (b) and (c) to add provisions re principles, goals or policies in the Integrated Resources Plan, Comprehensive Energy Strategy or Conservation and Load Management Plan, made a conforming change in Subsec. (b) and amended Subsec. (d) to delete provision re alleged need for increased revenues to finance expansion of capital equipment and facilities, effective July 8, 2013; P.A. 14-134 amended Subsecs. (b) and (c) by replacing references to electric companies with references to electric distribution companies and amended Subsec. (d) by deleting reference to electric company, effective June 6, 2014.

Cited. 174 C. 258; 176 C. 191; 216 C. 627; 219 C. 51; Id., 121; 234 C. 624.

Cited. 40 CS 520.