Connecticut Light and Power Requests to Raise Electric Rates

Connecticut Light and Power (CL&P) said it wants to raise electricity rates by 5.9 percent, on average, starting December 1, 2014. The request will be used to fix utility poles, wires and other parts of an aging electrical grid.

The average customer using 700 kilowatt hours a month would see an increase of $6.76 in monthly charges, the company said.

CL&P said it has an operating deficiency of $117 million for capital investments in infrastructure needed to improve reliability and service to customers.

The power company, which distributes electricity across most of Connecticut, will have to convince state regulators the rate hike is necessary before it can charge customers more.

The regulatory process involves a review by state technical and legal staff, written questioning, hearings, a draft decision, public comment and a final decision. As of Friday May 9th, no timeline had been set for these events.

CL&P filed its letter of intent for the price increase Friday with the Connecticut Public Utilities Regulatory Authority, or PURA. The authority said it welcomes written or e-mailed comments from the public, and the public may attend any hearing on the matter.

The company said this is the first time CL&P is applying for a distribution rate increase since 2010. In April 2012, when CL&P’s parent company, Northeast Utilities, merged with Massachusetts utility NStar, regulators stipulated that the new power company could not increase prices before Dec. 1, 2014.

In CL&P’s most recent request several years ago, the company asked for $177.6 million: $133.4 million starting July 1, 2010, and an additional $44.2 million starting July 1, 2011, according to PURA. Regulators allowed $63.4 million starting July 2010 and $38.5 million starting July 2011.

In a written statement released Friday, CL&P President Bill Herdegen said: “Last year, we had our best reliability year in over a decade, thanks to changes we’ve made on the system. Our targeted investments are helping to build the electric grid of the future one that is more reliable, more resilient and more efficient. In addition, we have worked hard to hold the line on rising operating costs, which has resulted in overall savings for our customers.”

The utility company said its system performed at its highest level of reliability fewer and shorter power outages last year of any year since 2000. The company said in its request to regulators “excluding major storm events, outages experienced by customers have reduced in duration from 141 minutes in 2011 to 107 minutes in 2013, showing a 24 percent improvement.”

In the aftermath of Tropical Storm Irene in August 2011 and the October 2011 snowstorm, some residents were without power for more than a week, sparking outrage at the company.

CL&P said it has reduced operating and maintenance costs since 2012 by $36 million, citing it as a direct benefit to customers.

The rate case could yield the first action against the utility for what regulators called a “deficient and inadequate” performance during the two 2011 storms.

In July 2012, regulators said they would consider reducing the company’s return on equity, or profit margin, the next time the company filed for a rate increase.

In February, when regulators ruled on CL&P’s request to recoup millions it paid during those two storms and three others in 2011 and 2012, they passed on docking the utility for its response to Irene and the October snowstorm. They allowed all but roughly $49 million of CL&P’s $414 million request.

In its statement Friday, CL&P referred to the February ruling: “The company’s filing will also implement PURA’s directives regarding the recovery of costs for system resiliency and the catastrophic storms that struck Connecticut in 2011 and 2012. Those storms wiped out power to hundreds of thousands of customers across the state. Although PURA disallowed a portion of CL&P’s storm costs, it ultimately approved storm recovery over a six-year period beginning on December 1, 2014, with $89.5 million in the first year as part of this rate request.”

CL&P transmits and delivers electricity to about 1.2 million customers in 149 cities and towns.

For information about the regulatory process, visit http://www.ct.gov/pura