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CL&P Rate Increase Still Too High For Some

by | Dec 1, 2014 6:04pm () Comments | Commenting has expired | Share
Posted to: Energy, Environment

According to a draft decision released Monday, state regulators would cut a nearly 60 percent rate increase sought by Connecticut’s largest utility company by more than half, but would still allow it to increase its revenue by more than $100 million, or about 20 percent.

Connecticut Light & Power had requested a revenue increase of nearly $232 million and a 10.2 percent “return on equity,” which is the rate of return the utility is allowed to collect on its own investments. For most residential customers this would have meant a fee increase from $16 to $25.50, which comes out to a 59.37 percent rate hike. The draft decision issued Monday would allow a fee increase to $19.25, or 20 percent.

The Public Utilities Regulatory Authority commissioners will vote on the final version of the decision on Dec. 17.

CL&P’s stated purpose for the requested increase was to improve and harden its infrastructure, which failed and caused more than half of the state to lose power twice during major storms in 2011.

The draft decision released Monday would allow the utility to raise its revenue by $130.17 million. CL&P has said about $117 million of that would be used to improve its infrastructure and prevent future outages.

“Over time, it’s crucial that we continue making targeted investments in Connecticut’s electric infrastructure,” Mitch Gross, a spokesman for CL&P, said Monday. “To that end, we are doing everything we can to secure the resources necessary to build and maintain an electric system that is stronger, more reliable and more efficient for our customers. This decision is a critical element of that effort.”

Attorney General George Jepsen, who was critical of the rate request, said he was pleased regulators enacted a penalty on CL&P’s return on equity for its poor performance during two major storms in 2011, but continues “believe a larger, more meaningful penalty is warranted in this rate case.”

In the draft decision, regulators lowered the return on equity request from 10.2 percent to 9.17 percent. According to regulators, the base return on equity allowed in the draft decision was further decreased to 9.02 percent for a one-year period to reflect a penalty for CL&P’s performance in preparing for and restoring service from Tropical Storm Irene in 2011 and the major snowstorm that occurred in October 2011.

But for many customers, the reduction to the requested revenue increase still isn’t enough of a punishment for the state’s largest utility.

“I remain concerned that the increase to the residential customer service charge included in this draft decision — though less than the 60 percent increase CL&P requested — will disproportionately impact low-income customers and I believe it should be held flat,” Jepsen said Monday. “All CL&P customers will still experience a significant increase in their rates as a result of this decision, and I anticipate filling additional comments with PURA prior to its final decision later this month, as I believe these further reductions, and possibly additional reductions, are appropriate.”

Teresa Eickel, executive director of the Interreligious Eco-Justice Network, agreed.

“This 20 percent increase in the residential fixed charge will undermine the state’s energy efficiency and solar programs, slow the growth of a green jobs economy, and hit hardest those who can least afford to pay,” she said.

John Erlingheuser, advocacy director at AARP Connecticut, said any rate increase would be too high.

“CL&P’s customer service rate is already the highest in the region, and one of the highest in the nation. Allowing any increase, no matter how small, is simply unwarranted and will have a detrimental impact on people already struggling to pay their bills this winter,” Erlingheuser said. “The increase is also a disincentive to conserve energy, since customer’s bills will go up before they turn on a single light.”

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