Connecticut Supreme Court Rules Against Electric Supplier in License Withdrawal Dispute, Affirming Cost Assessment

Clearview Electric, which had entered into a settlement agreement in 2021 requiring it to voluntarily withdraw from Connecticut's electric supplier market for six years, filed a motion to withdraw its license just two days after the Public Utilities Regulatory Authority ordered it to pay $178,832.11 for its share of redesigning the standard residential billing format. The company argued it had no outstanding obligations and should be allowed to relinquish its license without paying the assessment, claiming the cost allocation violated its settlement agreement that resolved prior regulatory violations.

Justice Bright rejected Clearview's arguments that the license withdrawal proceeding qualified as a contested case under the Uniform Administrative Procedure Act, finding no statutory requirement for a hearing on withdrawal requests. "Section 16-245 (f) provides in relevant part that PURA 'shall grant or deny a license application not more than ninety days after receiving all information required of an applicant' and 'shall hold a public hearing on an application upon the request of any interested party,'" Bright wrote. "The plaintiff undoubtedly had a statutory right to a hearing on its license application under § 16-245 (f), but the statute does not require that PURA hold a hearing on a motion to withdraw a license."

The court delivered particularly sharp language regarding Clearview's attempt to transform routine proceedings into contested cases based solely on docket numbering. "Given that 'the legislature, rather than the agencies, has the primary and continuing role in deciding which class of proceedings should enjoy the full panoply of procedural protections afforded . . . to contested cases,' we cannot conclude that the legislature intended for contested case status—and the attendant right to judicial review—to depend on the docket in which a proceeding is held," Justice Bright wrote.

The dispute arose from PURA's 2014 initiative to redesign billing formats for residential electric customers, with costs ultimately allocated among licensed suppliers based on their customer bases. Clearview had originally been licensed in 2007 but faced regulatory violations in 2021, leading to the settlement that required a $500,000 donation and the six-year market withdrawal. PURA initially designated the cost allocation proceeding as contested, then reversed course in July 2023, calling that designation "erroneous," a change Clearview never appealed.

Clearview contended that PURA's requirement to pay the assessment before withdrawing its license constituted a civil penalty requiring a hearing under Connecticut General Statutes Section 16-41. The court firmly rejected this theory, distinguishing between the pre-existing cost assessment and potential penalties for non-compliance. "PURA did not impose any new obligation on the plaintiff when it denied the motion to withdraw because the assessment already had been ordered in the allocation decision, which the plaintiff never challenged," Justice Bright explained. "That assessment is not a penalty under § 16-41; it is an allocation of costs imposed by PURA pursuant to §§ 16-244i (c) and 16-245d (b), without regard to a violation of any statute, regulation or order."

The court also found that Clearview waived its alternative argument that PURA's denial constituted an appealable declaratory ruling, noting the company had expressly argued the opposite position in the trial court. Justice Bright applied the doctrine of induced error, writing: "Because the plaintiff expressly pleaded and argued in the trial court that PURA did not issue a declaratory ruling, it has waived any claim that the court erred in failing to find that PURA did issue such a ruling."

Superior Court Judge Budzik had initially granted Clearview a stay of the cost assessment during the administrative appeal, but PURA issued a notice of violation when it believed enforcement had resumed after the dismissal. The Supreme Court's affirmance resolves the jurisdictional question, though Clearview still faces the underlying obligation to pay the assessment and potential penalties for non-compliance. The ruling clarifies that utility license withdrawal proceedings fall outside the contested case framework unless specifically required by statute, limiting suppliers' ability to challenge regulatory obligations through the withdrawal process.