Franklyn D.

Reynolds
President and Chief Executive Officer

September 30, 2024

Jeffrey R. Gaudiosi, Esq.

Executive Secretary
Public Utilities Regulatory Authority
10 Franklin Square
New Britain, CT 06051

Re: Notice of Intent of The United Illuminating Company to File Amended Rate Schedules
Dear Mr. Gaudiosi:
Pursuant to the Regulations of Connecticut State Agencies §16-1-22(b), The United
Illuminating Company (“UI” or the “Company”) herein provides notice that it intends to file with
the Public Utilities Regulatory Authority (“PURA”) an application to adjust its rates and charges
(the “UI Application”). The UI Application will propose to amend UI’s existing rate schedules
effective November 1, 2025, in order to address a significant deficiency in distribution-related
operating revenues. More specifically, the UI Application will propose a change in base
distribution rates to be implemented in the rate year beginning November 1, 2025, with proposed
rates designed to provide incremental operating revenues of approximately $105 million. These
incremental revenues are critically needed to support more than 350 major infrastructure projects
across UI’s service area, the majority of which will be located in and serve disadvantaged
communities. UI expects to file its rate application within 30 to 60 days from the date of this
notice.

UI is an electric distribution company that serves approximately 345,000 residential,

commercial and industrial customers in southwestern Connecticut. UI's service area consists of
17 municipalities, including the cities of Bridgeport and New Haven, and is home to a diverse
array of business sectors including aerospace manufacturing, healthcare, biotech, financial
services, precision manufacturing, retail and education.

UI’s most recent general distribution rate application was filed in September 2022. Prior
to that filing, UI had not requested a change in base distribution rates in approximately six years.
UI was able to prolong the interval between general distribution rate filings through September
2022 because PURA had previously approved a multi-year rate plan that stabilized rates for
customers over several years, while allowing sufficient revenues for the Company to operate its
utility business for the benefit of customers. In 2022, the Company’s general distribution rate
application sought to extend that framework through 2026, enabling continued investment in the
electric distribution system with predictable and stable rates for customers. However, in August
2023, PURA rejected outright the Company’s proposed three-year rate plan and largely denied
UI’s request for incremental base revenues, granting only a modest portion of the requested

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An equal opportunity employer
increase and disallowing the recovery of costs associated with more than $200 million in plant
additions for assets that are in use and serving customers, as well as other debilitating adjustments.

PURA’s August 2023 final decision on UI’s 2022 rate filing caused serious financial harm
to UI, leaving the Company with insufficient revenues to operate the business at pre-existing levels
and requiring the Company to scale back capital investments and retrench on operating
expenditures. In fact, UI’s actual earned return on equity for the twelve months ending June 30,
2024, was only 3.94 percent – below its actual cost of long-term debt. Accordingly, UI’s current
financial condition is neither sustainable nor in the best interest of customers, notwithstanding the
austerity measures that the Company has undertaken to try to maintain financial integrity and
attract necessary capital resources. As a result, UI is now compelled to file a new general
distribution rate application seeking the incremental revenues necessary to cover the reasonable
and good-faith costs of operating the system and completing plant additions that assure safe and
reliable service to customers.

The operation of an electric distribution system requires constant and consistent investment
to maintain the reliability of service to the homes and businesses that rely upon the availability of
reliable electric service. Providing the high level of electric service expected by customers requires
the utility to make both operating expense and capital investment expenditures that must be
adequately supported by revenues generated through customer rates. Capital investment and
operating costs cannot be supported without a revenue stream that is adequate to support those
costs. UI’s general distribution rate application will demonstrate that the current distribution-
related operating deficiency exists because current distribution rates are inadequate to cover the
cost of plant additions placed in service to customers over the last two years, since the date of
PURA’s rate decision in August 2023. These costs were denied for recovery in the last rate case,
accelerating the need for a follow-up rate case to true-up the overall cost of service to customer
rates, including the cost of capital investment and increasing operating expenses. If distribution
rates were set at a fair and adequate level – and paired with timely and adequate capital cost
recovery – UI would be enabled to extend the need for a change in base distribution rates for a
longer time interval. However, this result was not achieved by PURA’s final decision in the
Company’s last general distribution rate proceeding.

UI is acutely aware that consumers continue to experience economic challenges at this time
due to inflation affecting the cost of consumer goods and factors affecting energy prices. For this
reason, the UI Application will propose to continue the low-income discount rate to provide rate
relief to UI’s disadvantaged customers, as well as proposing to continue an economic development
rate to support continued commercial growth in UI’s service territory.

UI also well understands that no customer welcomes an increase in electric rates, even with
financial hardship considerations aside. However, customers have high expectations for service
reliability and customer service and meeting those expectations comes at a necessary and
unavoidable cost that requires the use of external debt obtained from the marketplace with the
expectation of a reasonable return. In breaking from long-standing precedent that recognized the
rate-stabilization and cash flow benefits of a three-year rate plan, as well as the benefit of timely
recovery of capital investments rather than piling up costs for a future rate case, PURA has set the
interests of customers back considerably, setting the stage for constant upheaval and
unpredictability in electric rates for both customers and the Company.

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 The Company’s recent experience in the financial markets bears out this reality. UI’s credit
rating outlook was revised from “stable” to “negative” by the Standard & Poor’s Global credit
rating service in the aftermath of PURA’s August 2023 final decision on UI’s last rate case. In a
subsequent bond issuance in November 2023, UI barely met the anticipated subscription level and
its Connecticut affiliates incurred wider (and more expensive) credit spreads. The investment
bankers attributed this difficulty, in part, to the limited interest to invest in Connecticut utilities
due to concerns over the regulatory environment and poor cost-recovery decisions. Similarly, on
September 5, 2024, Fitch Ratings published a press release in which it revised UI’s outlook from
stable to negative due to “ongoing regulatory challenges in Connecticut.”

To attempt to address the very significant concerns that credit-rating agencies are voicing
in relation to both the Connecticut regulatory environment and the Company’s cost recovery and
associated cash flows, as well as the Company’s degraded financial condition, UI plans to file a
request for interim rates pursuant to Conn. Gen. Stat. § 16-19(d) coincident with its rate
application. This request will seek an interim increase in distribution rates of approximately $40
million starting January 1, 2025, and will meet all of the prerequisites set forth in Section 16-19(d),
including provision for a bond with surety. The interim increase is critically necessary to prevent
substantial and material deterioration of the financial condition of the Company; to prevent
substantial deterioration of the adequacy and reliability of service to its customers; and, to conform
to the applicable principles and guidelines set forth in Conn. Gen. Stat. § 16-19e.

As required by R.C.S.A. §§ 16-1-22(b) and 16-1-53a, and by Paragraph 1.1 of PURA’s

Standard Filing Requirements for Large Public Utility Companies (“SFR”), UI provides the
following information:

1. In its application, UI will request PURA to approve an increase in distribution

operating revenues of approximately $105 million for the 12-month rate year
beginning November 1, 2025. This would represent an increase of approximately
9.3% over currently authorized overall revenues, and approximately 34.2% percent
over currently authorized distribution revenues.

2. UI’s application will result in various changes to UI’s tariffs and rate design. The
exact nature of any changes will ultimately depend upon the nature of the
allocations that PURA determines in its review of UI’s application and other related
proceedings.

3. The service area to be included in the application consists of the 17 municipalities

in the Company’s franchise area.

4. A list of the municipalities and the names and addresses of the municipal chief
executive officers to whom this notice was sent is shown in Exhibit A.

5. The test year is the 12-month period ending December 31, 2023 and the date certain
(test year end date) is December 31, 2023.

6. UI will include with its filing a request to establish interim rates pursuant to sections
16-19(d) and 16-19(e) of the Connecticut General Statutes and § 16-1-46 of the

-3-
 Regulations of Connecticut State Agencies for interim rates to take effect as of
January 1, 2025.

Consistent with Paragraph 1.2 of PURA’s SFRs, UI is providing copies of this Notice of
Intent today by electronic mail or personal delivery to the Governor of the State of Connecticut,
the chief executive officers of every municipality located within UI’s franchise area, and the Office
of Consumer Counsel.

Very truly yours,

Franklyn D. Reynolds
President, UIL Holdings Corporation

cc: The Honorable Ned Lamont, Governor

Municipal Officials – Exhibit A
Claire E. Coleman, Consumer Counsel

-4-
 Exhibit A
Municipal Officials
MUNICIPALITY ADDRESS NAME TITLE E‐MAIL ADDRESS

Ansonia 253 Main Street Mayor dcassetti@ansoniact.org

David Cassetti
Ansonia, CT 06401

Bridgeport 45 Lyon Terrace Mayor joseph.ganim@bridgeportct.gov

Joseph Ganim
Bridgeport, CT 06604

Derby 1 Elizabeth Street Mayor mayor@derbyct.gov

Joseph DiMartino
Derby, CT 06418

Easton 225 Center Road First Selectman dbindelglass@eastonct.gov

David Bindelglass
Easton, CT 06612

East Haven 250 Main Street Mayor mayor@townofeasthavenct.org

Joseph Carfora
E. Haven, CT 06512

Fairfield 611 Old Post Road First Selectman firstselectman@fairfieldct.org

William Gerber
Fairfield, CT 06824

Hamden 2750 Dixwell Avenue Mayor lgarrett@hamden.com

Lauren Garrett
Hamden, CT 06518

Milford 70 West River Street Anthony Giannatasio Mayor agiannattasio@milfordct.gov

Milford, CT 06460

New Haven 165 Church Street Mayor JElicker@newhavenct.gov

Justin Elicker
New Haven, CT 06510

North Branford 909 Foxon Road Town Manager mdownes@northbranfordct.gov

Michael Downes
N. Branford, CT 06471

North Haven 18 Church Street First Selectman freda.michael@town.north-haven.ct.us

Michael Freda
N. Haven, CT 06473

Orange 617 Orange Center Rd James Zeoli First Selectman jzeoli@orange-ct.gov

Orange, CT 06477

Shelton 54 Hill Street Mark Lauretti Mayor m.lauretti@cityofshelton.org

Shelton, CT 06484

Stratford 2725 Main St Laura Hoydick Mayor lhoydick@townofstratford.com

Stratford, CT 06615

1
MUNICIPALITY ADDRESS NAME TITLE E‐MAIL ADDRESS

Trumbull 5866 Main Street Vicky Tesoro First Selectman

Trumbull, CT 06611 Firstselectman@trumbull-ct.gov

West Haven 355 Main Street Dorina Borer Mayor

W. Haven, CT 06516 dborer@westhaven-ct.gov;

Woodbridge 11 Meetinghouse Ln First Selectman

Mica Cardozo
Woodbridge, CT 06525 mcardozo@woodbridgect.org