🔒Eversource, UI sue Connecticut over law targeting transmission-rate ‘bonus’

Eversource Energy and United Illuminating have sued four Connecticut agencies and their top officials, asking a federal judge to block a 2025 state law designed to eliminate an incentive the utilities receive for voluntarily connecting their transmission systems to the regional grid. The lawsuit, filed Monday in U.S. District Court in Connecticut, comes after the state on June 11 asked the Federal Energy Regulatory Commission (FERC) to eliminate the incentive saying it had become obsolete. The 2025 state law bars electric distribution companies from owning or controlling transmission facilities in Connecticut unless they participate in ISO New England. The federal lawsuit challenges the state law itself. The utilities argue Connecticut cannot require them to participate in ISO New England, the regional electric grid operator, calling the mandate an effort to strip away the federally approved transmission-rate bonus they have collected for decades. They contend the law conflicts with the Federal Power Act, improperly intrudes on FERC’s exclusive authority over interstate electric transmission and violates multiple constitutional protections. Named as defendants are state Office of Consumer Counsel Claire Coleman, Attorney General William Tong, Department of Energy and Environmental Protection Commissioner Katie Dykes and the four commissioners of the Public Utilities Regulatory Authority, each sued in their official capacity. The disputed incentive has been part of transmission rates since 2004. It was created to encourage utilities to voluntarily place their transmission systems under the operational control of ISO New England, New England’s regional grid operator. State officials estimate eliminating the bonus would save ratepayers about $4.5 million annually. In Monday’s lawsuit, the utilities argue the state cannot make participation mandatory because federal law intentionally leaves that decision voluntary and uses financial incentives to encourage utilities to join regional grid systems. They contend Connecticut’s law was specifically crafted to force FERC to eliminate the incentive. “The law does not simply intrude on federal territory; it seizes utilities’ property, nullifies their federally approved contracts, and undermines their role as partners in a system designed to harmonize local interests with national energy goals,” the complaint states. Eversource spokesperson Sarah Paduano called the state’s push an overreach that encroaches on federal regulatory authority. She said the company’s transmission investments have saved customers billions of dollars by reducing congestion costs and warned the change would send a negative message to those who invest in Connecticut’s energy infrastructure. Paduano also contested the projected savings, noting the change would amount to roughly 10 cents a month for the average household. “This overreach by Connecticut will do little — if anything — to benefit customers in the short term while causing them significant long-term harm,” she said. Tong said the state has no intention of backing down. “We sued to stop these brainless bonuses, and so now the utilities are trying to strike down the law,” he said, adding that the state would keep fighting against “every padded profit and unjustified cost” in Connecticut energy bills. Coleman said courts have already weighed in on similar disputes. “Courts have already upheld FERC’s authority to remove this profit bonus for transmission under similar circumstances and we will work to uphold the legislation being challenged and ensure it can appropriately protect Connecticut ratepayers,” she said. The lawsuit seeks a declaration that the law is unconstitutional and an injunction preventing Connecticut from enforcing it. The filing comes as Gov. Ned Lamont has intensified his criticism of Connecticut’s electric utilities over rising electricity costs. In June, he proposed legislation requiring Eversource and United Illuminating to periodically justify their monopoly status and accused the companies of becoming too comfortable raising rates. The utilities are expected to file a separate response with FERC opposing the state’s request to eliminate the transmission incentive.