Connecticut Light & Power rate increase stands, state regulators rule

By: Luther Turmelle |

State utility regulators issued a final ruling Wednesday in a case that will increase fixed rate charges that Connecticut Light & Power customers pay from $16 per month to $19.25 each monthly billing period.

The decision by Public Utilities Regulatory Authority commissioners is largely unchanged from one issued by the agency earlier this month. The draft ruling allowed CL&P to recover $130.172 million from ratepayers while PURA’s final decision cuts that amount by $472,00.

In addition to the increase in the fixed rate service charge increase of $3.25 per month, the rate decision also allows for increased charges based on the amount a customer uses.

Overall, an average residential customer using 700 kilowatt hours of electricity would see an increase of approximately $7.12 per month, an amount that includes the fixed rate charge increase, said Michael Coyle, a PURA spokesman. That is an increase of 5.5 percent for the average customer, Coyle said, and is $5.36 per month, or 4.16 percent, less than the increase CL&P was seeking.

CL&P’s June filing with the regulatory agency had sought additional revenue of $231.58 million and a 10.2 percent return on equity. That request was reduced to nearly $221.10 million at the end of September. PURA’s draft ruling would allow revenues of $130.17 million and reduce the rate of return to 9.17 percent.

The PURA ruling makes further cuts to the return on equity, cutting it to 9.02 percent for one year as a penalty for CL&P’s handling of the power outages associated with Tropical Storm Irene in 2011 and the major snowstorm in October of that year.

U.S. Sen. Richard Blumenthal called PURA’s final ruling “disappointing and unconscionable.”

“CL&P’s fixed charge for residential users will now be the highest in New England, an unacceptable distinction with serious consequences for Connecticut ratepayers—most notably low-income and elderly users,” Blumenthal, D-Conn., said in a statement. “This fee will hit consumers before they even turn on a single light, discouraging and devaluing conservation and efficiency measures and damaging our economy.”

Consumer Counsel Elin Swanson Katz expressed what she called “serious reservations” about the rate hike approved for CL&P by PURA.

“In these times, when consumers are already facing drastic increases in their electric bills because of rising costs in the regional energy market, we should ensure that we award not one dollar more than is absolutely necessary for CL&P to effectively run its company,” Katz said in a statement. “I do not believe that CL&P proved that they needed such a large increase in rates.”

Katz said even before the fixed rate service charge increase takes effect, CL&P’s current customer service charge of $16 is already more than twice the amount charged by Boston Edison. The Massachusetts-based utility, which like CL&P is a subsidiary of Northeast Utilities, has a monthly customer service charge of $6.43, she said.

In advance of Wednesday’s ruling by PURA, state Sen. Art Linares, R-Westbrook, sent the agency’s commissioners a list of more than 800 people who had signed a online permit that he had circulated in opposition to the rate increase. Linares’ district includes Clinton, Deep River, Essex, Old Saybrook and Westbrook.

“We can’t afford more rate hikes,” he said.

John Erlingheuser, AARP Connecticut’s Advocacy Director, said PURA’s ruling was disappointing.

“While we are heartened by the fact that PURA took into account the vast public outcry in its decision to slash CL&P’s original rate request, we remain disappointed that the final decision still allows for a significant increase in the utility’s fixed customer service charge,” Erlingheuser said in a statement. “AARP believes any increase in CL&P’s fixed customer service charge is unfair and bad for ratepayers, especially seniors and lower-income individuals and families who already pay a disproportionate share of their income for heat and electricity. The increase is especially egregious since CL&P’s fixed charge is already one of the highest in the nation.”

Mitch Gross, a CL&P spokesman, said the rate increase is needed because “there are significant expenses associated with running a large and complex electric system and it is crucial that rates recover these costs so that we can continue making targeted investments in Connecticut’s electric infrastructure.”

“We are committed to making our system more reliable and efficient for our customers, as demonstrated by the fact that 2013 was our best reliability year in over a decade, with fewer and shorter power interruptions,” Gross said in a statement. “We are also proud of the savings our merger provided and will continue to manage costs to benefit our customers.”

Coyle said the changes between the draft ruling and the final decision include a $1 million increase in depreciation allowance, which he said benefits consumers, reductions in cash working capital as well as an adjustment in the revenues that CL&P gets for handling administrative duties associated with utility poles around the state.

Coyle said the increases approved in the final decision take effect this month, but won’t appear on a majority of customers bills until January because of the way CL&P’s billing cycles are structured.

PURA’s final decision comes after 13 evidentiary hearings and three public comment sessions.

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Connecticut Light & Power rate increase stands, state regulators rule