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Avangrid, the parent company of United Illuminating, made $881 million in 2022 – increasing its profits by almost 25 percent from 2021. But the company said its profit from United Illuminating, which made a profit of almost $112.7 million in 2022 – was down about 10 percent from last year.
After Avangrid issued its 2022 earnings release ahead of a shareholder presentation scheduled for Wednesday morning, United Illuminating followed with its own news release declaring that the impact of inflation, high interest rates and labor costs meant the profits from electric distribution in Connecticut were down about 19 percent from 2021 – but didn’t provide a dollar figure.
The announcement came as United Illuminating makes its case to regulators at PURA that the company should be allowed to raise its distribution rates 5 percent a year for the next three years starting in September.
United Illuminating has said inflation has increased its costs by more than 7 percent since its last rate case in 2019. The company is allowed to make a 9.1 percent return on equity in its investments, but United Illuminating reported to PURA last November that it had earned a 7.36 percent return over the prior 12 months.
“While overall revenues increased, this was driven by a substantial increase in energy supply costs set by out-of-state generation companies, which we collect on behalf of our customers by law, then are used to pay the supply providers at no markup or profit to our business,” the statement from United Illuminating said.
Statements issued in Avangrid’s earnings release, and a press release from United Illuminating, painted different pictures of the companies’ financial directions.
Avangrid CEO Pedro Azagra said the company managed high inflation and interest rates, and supply chain disruptions to achieve “excellent results,” while United Illuminating blamed the “challenging macro-economic environment,” supply chain shortages and high labor costs for its lower profits in Connecticut.
Avangrid said its overall distribution networks – which include United Illuminating and seven other gas and electric companies in Connecticut, Massachusetts, Maine and New York – made $628 million in profit in 2022, down from $636 million in 2021.
It bolstered its total profits by making $386 million on its renewable energy business, up from $131 million in 2021. The company said those profits came largely from restructuring its offshore wind partnership with Copenhagen Infrastructure Partners – giving Avangrid full ownership of the 804 MW Park City Wind. It said it also benefited from tax credits and improved pricing.
United Illuminating claims credit for “providing direct financial relief” to customers
In its press release, United Illuminating – which serves about 341,000 customers in 17 towns and cities in the New Haven and Bridgeport areas – said the company understands that its customers are also struggling with rising costs.
It said the company “acted with urgency” to help struggling customers manage more than 40 percent increases in electric bills this winter by “directing $3.3 million to Operation Fuel” – a sum Avangrid was ordered to pay to the fuel-assistance nonprofit to settle a fine from PURA over United Illuminating and Avangrid’s gas subsidiaries sending customers to collections during the COVID moratorium on electric shutoffs.
The company also renewed its calls for increasing accountability on out-of-state electric generators that it has blamed for high power prices this winter. It called on “the companies profiting from these increases to join us in providing direct financial relief.”
Eversource – the state’s largest electric utility, which reported $1.4 billion in profits from its utilities in Connecticut, Massachusetts and New Hampshire, while its CEO doubled his pay to nearly $13 million – put $10 million of its profits towards credits for its low-income customers.
Both United Illuminating and Eversource agreed to speed up the return of money they saved from a favorable contract to buy power from the Millstone Nuclear Power Station, and to offer a temporary bill credit of $24 a month through June to hardship customers earning less than 60 percent of the median income in place of a low-income discount rate program that won’t begin until 2024.
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This article was updated to clarify that the $10 million Eversource donated went directly to bill credits for customers, not to Operation Fuel.