May 4, 2018 Mr. Jeffrey R. Gaudiosi, Esq. Executive Secretary Public Utilities Regulatory Authority 10 Franklin Square New Britain, CT 06051 Re: Docket No. 76-03-07 Investigation to Consider Rate Adjustment Procedures and Mechanisms Appropriate to Charge or Reimburse the Consumer for Changes in the Cost of Fossil Fuel and/or Purchased Gas for Electric and Gas Public Service Companies Compliance Order No. 1 Dear Mr. Gaudiosi: The United Illuminating Company ( UI or Company ) submits the calculation of rate of return on common stock equity (ROE) on a Distribution-only basis (i.e., total Company excluding Transmission) in compliance with the above-referenced proceedings and in response to the Authority s letter request dated March 27, 2003. Exhibits 1a through 1e Average ROE for UI Distribution of 9.81% for the twelve months ended March 31, 2018. Exhibit 2a through 2e Average ROE for UI Distribution of 2.46% for the three months ended March 31, 2018. I hereby certify service of this filing upon all parties and interveners of record in this proceeding. If the Authority or the Staff has any questions regarding this filing, please call me at 203-499- 2323. Very truly yours, Steven P. Favuzza Vice President, Controller & Treasurer of UIL Holdings Corporation on behalf of The United Illuminating Company Attachments 180 Marsh Hill Road, Orange, CT 06477 www.uinet.com An equal opportunity employer
Exhibit 1a THE UNITED ILLUMINATING COMPANY STATEMENT OF INCOME TWELVE MONTHS ENDED March 31, 2018 SALES OF ELECTRICITY Residential Service $ 242,119,185 Commercial Service 140,991,203 Industrial Service 21,238,553 Other Sales to Ultimate Consumers 9,222,524 Total Sales of Electricity 413,571,464 OTHER ELECTRIC REVENUES 3,821,889 TOTAL ELECTRIC OPERATING REVENUES 417,393,354 ELECTRIC OPERATING EXPENSES: Operation & Maintenance Expenses 192,271,895 Depreciation and Amortization 56,960,095 Total Taxes 89,145,929 Total Electric Operating Expenses 338,377,919 TOTAL UTILITY OPERATING INCOME 79,015,435 OTHER INCOME AND DEDUCTIONS - NET 7,032,085.80 ALLOWANCE FOR EQUITY FUNDS USED DURING CONSTRUCTION 765,148 TOTAL INCOME 86,812,669 INTEREST CHARGES AND DIVIDENDS ON PREFERRED SECURITIES Interest on Long-Term Debt 25,173,109 Amort. Debt Disc., Prem. & Expense 1,222,406 Other Interest Charges 1,992,544 Allowance for Borrowed Funds Used During Construction - Credit (936,421) Net Interest Charges 27,451,638 NET INCOME $ 59,361,031
THE UNITED ILLUMINATING COMPANY STATEMENT OF INCOME (RATEMAKING) TWELVE MONTHS ENDED March 31, 2018 Exhibit 1b OPERATING REVENUES Residential Service $ 242,119,185 Commercial Service 140,991,203 Industrial Service 21,238,553 Other Sales to Ultimate Consumers 9,222,524 Total Sales of Electricity 413,571,464 OTHER ELECTRIC REVENUES 3,821,889 TOTAL ELECTRIC OPERATING REVENUES 417,393,354 ELECTRIC OPERATING EXPENSES: Operation & Maintenance Expenses 192,185,575 Depreciation and Amortization 56,960,095 Total Taxes 89,208,496 Total Electric Operating Expenses 338,354,166 ELECTRIC UTILITY OPERATING INCOME $ 79,039,188
Exhibit 1c THE UNITED ILLUMINATING COMPANY RATE BASE AT March 31, 2018 AND RATE OF RETURN ON RATE BASE FOR THE TWELVE MONTHS ENDED March 31, 2018 REFLECTING THE DECISION TO DOCKET NOS. 840601, 880914, 920605, 960329, 990304, 990335 AND 01-10-10 End of Period March Average 2018 Rate Base: Utility Plant in Service $ 1,704,627,555 $ 1,755,423,645 Less: Accum. Prov. For Depr. & Amort. & Cost of Removal 444,733,857 460,770,163 Net Utility Plant in Service 1,259,893,698 1,294,653,482 Add: Working Capital 26,100,321 23,408,621 Prepaid Expenses 1,937,981 1,790,264 Regulatory Asset - SFAS 158 230,186,872 215,559,612 Regulatory Asset - UPZ 17,179,228 13,485,906 Deferred Taxes: Pension Costs (19,806,969) (19,848,006) 2013 Rate Case Storm Reserve 2,778,582 1,531,355 Pension Liability (taxes on SFAS 158) 80,690,087 73,488,415 Injuries and Damages 1,680,434 1,555,584 Vacation Accrual 1,026,050 1,026,050 Allowance for Bad Debt 1,006,760 950,199 Regulatory Liability - UPZ Amortization 640,819 - Deduct: Customer Advances for Construction 2,590,327 2,182,192 Allowance for Bad Debt 2,538,462 2,400,000 Pension Liabilities 226,058,481 223,378,438 2013 Rate Case Storm Reserve 6,479,650 2,370,965 Reserve for Injuries and Damages 4,055,498 4,093,505 Accrued Vacation 2,568,947 2,568,947 Regulatory Liability - UPZ Amortization 1,568,712 - Deferred Taxes: Accelerated Tax Depreciation 155,921,785 156,322,212 Regulatory Asset - SFAS 158 80,690,087 73,488,415 Pensions (account 282) (17,911,153) (20,040,866) Regulatory Asset - UPZ 7,163,447 5,850,075 Repairs and maintenance deduction 129,688,159 129,641,992 Rate Base $ 1,001,901,460 $ 1,025,345,604 Returns on Ratebase: Operating Income $ 79,039,188 $ 79,039,188 Rate of Return on Rate Base 7.89% 7.71%
The United Illuminating Company Exhibit 1d Rate of Return on Rate Base Common Stock Equity For Twelve Months Ended March 31, 2018 Average End of Period Capitalization Average Embedded Capitalization Rate Embedded Ratio Rate Base Cost Return Ratio Base Cost Return Total $ 1,001,901,460 $ 79,039,188 $ 1,025,345,604 $ 79,039,188 Less Long-term Debt 45.09% 451,757,368 5.55% 25,076,129 43.00% 440,898,610 5.52% 24,342,494 Applicable to Common Stock 54.91% $ 550,144,092 $ 53,963,059 57.00% $ 584,446,994 $ 54,696,694 Rate of Return on Rate Base Common Stock Equity 9.81% 9.36%
The United Illuminating Company Exhibit 1e Rate of Return on Common Stock Equity For the Twelve Months Ended March 31, 2018 End of Period: Income for Common Stock $ 59,361,031 Common Stock Equity $ 960,488,041 = 6.18% Average: Income for Common Stock $ 59,361,031 Common Stock Equity $ 926,710,036 = 6.41%