Lawmakers urge rejection of CL&P plan on storm costs
Hartford - A request to Connecticut regulators by the state's largest electric utility to charge ratepayers $414 million as reimbursement for storm cleanup and restoration ran into opposition on Monday.
U.S. Sen. Richard Blumenthal and U.S. Rep. Joe Courtney urged state regulators to reject more than half of the company's request - $286 million - for the costs of damage from a snowstorm in October 2011 and Tropical Storm Irene in August 2011.
The snowstorm left hundreds of thousands of customers without power for as long as 11 days.
"It is simply inconceivable that any costs associated with this storm should be recovered from the same ratepayers who struggled without power and without any information on how much longer the utility would need to restore their electricity," the two Democratic lawmakers said.
CL&P said its storm response could have been better in 2011 but added that storm preparation and cleanup are costly.
"Connecticut saw epic devastation in the 2011 and 2012 storms that caused major damage to CL&P's electric system," the utility said in response to the criticism from Blumenthal and Courtney. "While we recognize there's always room for improvement in responding to storm emergencies, and that our response could have been better in 2011, preparing for and responding to such devastating storms is very expensive and something for which we, our customers and our regulators rightly expect we'll continue to do in the future."
The utility is permitted to seek financial recovery of storm-related costs. The Public Utilities Regulatory Authority will schedule hearings and examine the utility's costs, which include bringing in outside line and tree workers, replacing damaged equipment and staffing. Regulators will determine how much may be reimbursed.
CL&P said the October 2011 snowstorm resulted in costs of $175 million. Superstorm Sandy last October cost $156 million, Irene cost $111 million, and two storms in June 2011 and last September cost about $20 million combined.
The $462 million total cost would be reduced by $8.3 million set aside in a storm reserve fund and $40 million that Northeast Utilities, CL&P's parent company, agreed to exclude as part of its deal with the state for its $5 billion purchase of Boston's NStar last year.
The utility said that if the rate increase is approved, a typical residential CL&P customer would pay about $3 a month more. The earliest that rates could increase is Dec. 1, 2014, which also is part of CL&P's settlement with Connecticut as part of the NU-NStar deal.
Elin Swanson Katz, the state's consumer counsel, said Monday that state officials will do their own calculations to determine what the additional cost might be. She and Attorney General George Jepsen say they will review CL&P's filing when it is submitted to regulators.
Blumenthal and Courtney also demanded that Northeast Utilities disclose the compensation of executives before CL&P wins approval from regulators for a rate increase.
In agreeing to the NU-NStar deal, Massachusetts Attorney General Martha Coakley insisted that customers be shielded from merger costs such as special payments to keep executives from leaving or additional pay to executives as they depart. She demanded fuller compensation disclosures that Blumenthal and Courtney say should also be provided to Connecticut regulators.
NU Chief Executive Thomas J. May wrote Coakley last month saying he was not awarded special bonus payments in cash, deferred income or stock in relation to the NU-NStar deal. He provided her with some compensation details, and CL&P said it will provide details to Connecticut regulators if asked.
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