GenConn Energy, LLC v. Public Utilities Regulatory Authority

Citations

• 348 Conn. 532

Syllabus

Pursuant to statute (§ 16-243u), ''in an annual retail generation rate contested case,'' a peaking generation facility ''shall be entitled to recover its prudently incurred costs,'' and the Public Utilities Regulatory Authority (PURA) ''shall review such recovery of costs consistent with the princi- ples set forth in sections 16-19, 16-19b and 16-19e . . . .'' Pursuant further to statute (§ 16-19e (a) (4)), PURA shall examine and review a peaking generation facility's recoverable costs to ensure ''that the level and structure of rates be sufficient, but no more than sufficient,'' to cover the facility's operating costs. The plaintiff electric supplier, G Co., appealed to the trial court from the final decision of the defendant, PURA, which reduced G Co.'s proposed return on capital with respect to two of G Co.'s peaking generation facilities that were designed to provide additional electric supply to Connecticut consumers at times of increased demand. G Co., as a peak- ing generation provider, is required to submit its Annual Fixed Revenue 348 Conn. 532 FEBRUARY, 2024 533 GenConn Energy, LLC v. Public Utilities Regulatory Authority Requirements application (application) to PURA every year to set out the recoverable capital it seeks for the upcoming year. In determining the allowable recoverable capital, PURA first determines the peaking generation facility's rate base, which represents the value of the property on which the facility is permitted to earn a rate of return. The rate base is then divided based on the debt-to-equity ratio to find the portion of the rate base that is attributable to each. Finally, the portion of the rate base that is attributable to debt and the portion that is attributable to equity are multiplied by the applicable rate to find the total amount the facility should be allowed to recover. For each of G Co.'s applications for 2010 through 2020, it sought and was allowed to recover, as part of the recoverable capital, its actual annual finan