NASUCA on Affordability: Claire Coleman

Affordability is one of those issues that everyone is talking about right now. It comes up in rate cases, in long-term planning, and in conversations about everything from grid modernization to large-load growth. But for most customers, it still shows up in a much simpler way: a number on a monthly bill that may or may not fit within the rest of the household budget.

The challenge, of course, is that those numbers don’t happen by accident. They are the result of a long series of decisions about what to build, how to build it, and how those costs are ultimately recovered.

This feature brings together a range of perspectives on how those decisions are being made today. In our conversation with NASUCA Executive Director David Springe, there is a clear sense of how much the regulatory landscape has changed, and how that growing complexity is shaping affordability challenges across the country. 

That theme carries through in a roundtable with the NASUCA Officers, where the focus shifts to the day-to-day work of evaluating investments, asking difficult questions, and making sure the analysis behind major decisions holds up. 

State perspectives help ground that discussion. Chris Ayers describes the pressures building in North Carolina as infrastructure needs and large-load growth accelerate, while also emphasizing the importance of managing costs before they reach the bill. Claire Coleman offers a view from Connecticut, where affordability is being incorporated more directly into program design and regulatory frameworks. 

Across each of these conversations, one idea comes up again and again: affordability is not just something to address after the fact. It is something that has to be built into the decisions that shape the system itself.

PUF’s Rachel Bryant: Every state structures consumer advocacy a little differently. What is the Office of Consumer Counsel (OCC) in Connecticut?

Claire Coleman: The OCC represents the interests of Connecticut’s utility customers in regulatory and policy proceedings where critical decisions regarding electric, natural gas, water, and telecommunications services are made. We are structured as an independent state agency, separate from both the governor’s office and the Attorney General.

That independence allows us to evaluate rate cases and policy proposals solely from the perspective of what is best for ratepayers. Our job is to determine whether utility decisions, investments, or regulatory changes ultimately serve the interests of customers.

Most of our work takes place before the Connecticut Public Utilities Regulatory Authority, or PURA, where we participate in rate cases, conduct investigations, and provide expertise in policy development dockets. These efforts are often initiated by legislation and focus on issues like affordability programs, clean energy policy, and ratemaking reforms.

PUF: What does that advocacy look like in practice?

Claire Coleman: In addition to participating in regulatory proceedings, and the legislative process, our office also represents ratepayers when PURA decisions are appealed.

Because we are separate from the Attorney General’s office, the Attorney General represents PURA itself in court while our office presents the consumer perspective. That means our work often continues well beyond the regulatory process.

In recent years, several pro-consumer PURA decisions have been challenged by utilities, and we have continued advocating for ratepayers through the appeals process. Some of those cases have reached the Connecticut Supreme Court where many of our hard-fought consumer protections have been upheld.

More broadly, our role is to represent the interests of all customers. That can be complicated because different households face different challenges. But a core part of our work is ensuring that affordability and equity remain central to regulatory decisions, particularly for low-income households who often face the greatest energy burdens.

Our office also works on telecommunications and broadband issues. Reliable internet access has become essential for education, employment, and healthcare, so ensuring that those services remain affordable is increasingly part of the consumer protection mission.

PUF: Connecticut has been active in regulatory reform in recent years. Where have you seen the most meaningful progress?

Claire Coleman: One of the most significant efforts underway in Connecticut is the development of performance-based regulation. It is still evolving, but the objective is to better align utility investments with the outcomes customers actually care about.

Historically, utilities have often made investments first and evaluation only takes place after the fact when approval is sought through the ratemaking process. Performance-based regulation introduces a different framework. It focuses on defining clear goals and measuring whether utilities are delivering results.

Several dockets over the past few years have addressed different parts of that framework. One area focuses on reforms to the ratemaking process itself, particularly as utilities move toward multi-year rate cases. Those structures need safeguards that promote transparency and cost discipline.

Another component involves performance metrics and incentives. The goal is to create accountability around outcomes such as reliability, system efficiency, and customer-facing service and response.

A third area focuses on distribution system planning. Again, regulators traditionally evaluate infrastructure investments only after they have been made. By improving planning processes, regulators and stakeholders can examine proposals earlier, before those investments are finalized. That approach tends to lead to better decisions and fewer disputes regarding recovery later.

Investments in infrastructure are necessary and critical, especially in New England, so having these defined metrics can ensure regulators, consumer advocates and utilities are aligned and effectively communicating.

PUF: Connecticut is also often cited for its consumer protections in the retail supplier market. What has the state done there?

Claire Coleman: That is an area where Connecticut has tried to strike a careful balance between market access and consumer protection.

Historically, low-income customers were not allowed to participate in the third-party supplier market because there had been significant concerns about overcharging. Many of those customers were already enrolled in programs like the matching payment program or the low-income discount rate, which are funded by all ratepayers.

There were concerns that hardship customers might be exposed to higher prices in the supplier market without adequate protections, which would ultimately harm both the vulnerable customer and ratepayers across the board.

During the energy price spikes that followed Russia’s invasion of Ukraine, however, some customers raised a fair question. They wanted to know why they could not access potentially lower offers available through competitive suppliers.

The legislature ultimately changed the statute to allow low-income customers to participate, but with an important protection, in large part due to OCC’s advocacy. If a customer’s supplier rate ever becomes higher than the standard service rate, that customer is automatically returned to standard service.

Suppliers were not thrilled with that provision, but it significantly reduces the risk for vulnerable customers while still allowing them to participate in the market.

PUF: Affordability can be difficult to define when households are managing several essential bills at once. How does your office approach that question in a way that can guide regulatory decisions?

Claire Coleman: We began grappling with that question when Connecticut was designing its low-income discount rate program. At that point we needed a definition of affordability that regulators could apply in real proceedings.

We started with the widely recognized energy burden framework, which generally considers an affordability challenge as households spending more than six percent of their income on energy.

Traditionally, that six percent has been divided into roughly four percent for electricity and two percent for heating fuels. But that framework reflects an earlier era, when energy bills were more clearly separated from other essential services.

Today, many households are also paying for water, telecommunications, and internet, all of which increased during the pandemic and have sustained higher use since. These costs all compete for the same limited household budget.

Because of that, we treat the six percent energy burden as a benchmark rather than a strict rule. It provides regulators with a useful way to identify when energy costs begin to strain household finances while still allowing flexibility as we consider the broader picture of overall expenses.

That framework ultimately informed the design of Connecticut’s low-income discount rate program, which is structured across five income tiers. The goal is to keep energy burdens below that six percent threshold within each tier so that bills remain manageable relative to household income or in terms of a monthly budget.

At the lowest income levels, fully closing the affordability gap would require substantial subsidies and support mechanisms. That is a challenge every state faces. But the principle is straightforward. When customers receive bills that are realistically affordable, they are far more likely to stay current on their payments. That reduces arrearages and ultimately benefits the entire system.

PUF: Utilities are also facing pressure to invest in new infrastructure while keeping bills affordable. How do you think about that balance?

Claire Coleman: That is one of the central challenges facing regulators today.

In Connecticut, like many states, there is a real need for infrastructure investment. At the same time, customers are already experiencing affordability pressures.

Advanced metering infrastructure is a good example. AMI has the potential to provide meaningful benefits, including better visibility into energy usage, support for time-varying rates, and improved grid management.

But it also requires a large upfront investment. When projects of that scale are proposed, customers understandably want to know whether the benefits justify the cost.

Our view is that both perspectives matter. In some cases, a short-term bill impact may be justified if the long-term benefits are clear. But accountability is essential. Utilities need to demonstrate that they are managing those investments responsibly and that they are delivering the benefits they promised.

Connecticut has also explored ways to reduce the cost of major, but necessary investments. For example, legislation allows AMI investments to be financed through securitization, which can lower financing costs compared with traditional capital structures.

PUF: If you could change one public misconception about utility regulation and affordability, what would it be?

Claire Coleman: One thing that often gets lost in public discussions is the idea that affordability programs are optional costs that regulators could simply eliminate.

Utilities operate as regulated monopolies, which means they are entitled to recover the reasonable costs of providing service. When customers cannot pay their bills, those costs do not disappear. They are ultimately recovered from other ratepayers which is consistent with utility regulatory law across the board.

Programs like low-income discounts or matching payment plans are designed to address that challenge earlier and more effectively. They help ensure verified income-eligible customers can reasonably contribute to their bills, rather than falling behind and allowing balances to grow into large arrearages.

While these programs provide financial assistance to income-eligible customers, they also serve an important tool to manage affordability for all ratepayers systemwide. When they work well, they reduce uncollectible costs and create more stability for both customers and utilities.
 

NASUCA conversations at fortnightly.com

• David Springe, NASUCA Executive Director
• Chris Ayers, North Carolina Utilities Commission Public Staff Executive Director
• Claire Coleman, Connecticut Consumer Counsel
• NASUCA Roundtable: Confronting Affordability and Equity, with NASUCA President Michael Moody, Vice President Tom Content, Treasurer Anthony Ornelas, Secretary Karen Stachowski, and Executive Director David Springe