We believe these companies recently have had difficulty effectively managing regulatory risk in the state. The recently passed Senate Bill 7 now gives Connecticut's Public Utilities Regulatory Authority (PURA) greater latitude in determining whether companies over earn, prohibits PURA from reauthorizing the electric system improvements charge, and allows PURA's discretion over the use of decoupling, whereas decoupling was previously codified into state law. Overall, we believe this law decreases utilities' cash flow predictability and increases regulatory lag. Furthermore, recent rate orders for Aquarion Co. and The United Illuminating Co. (an Avangrid Inc. subsidiary) also significantly deviated from our base cases. These rate orders did not approve the multiyear rate plans filed, included material disallowances, penalties for United Illuminating, and below-average
