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    Tuesday, April 23, 2024

    Senator unfairly zaps electricity regulator

    Concerning the recent rate increase, the fact is Connecticut Light & Power is entitled to make a profit and to have the fiscal means necessary to maintain its massive distribution system across the state. Company critics, who are myriad, would not be satisfied with any rate increase awarded the company. As for opportunistic politicians, there is seemingly no downside to knocking a powerful utility with a poor track record or the agency charged with regulating it.

    A fair assessment of the situation, however, leads to the conclusion that the Connecticut Public Utility Regulatory Authority (PURA), in recently improving the rate increase, did its job in balancing CL&P operational needs with the desire to control the state's high power costs and provide incentives to conserve.

    One wouldn't think so, however, after listening to the rhetoric coming from Sen. Richard Blumenthal, who with each passing month seems to increasingly miss his old state attorney general job of blasting state businesses with made-for-TV press releases and pronouncements. So now, he just acts like he is still the attorney general.

    Sen. Blumenthal called the rate increase approved by PURA "horrendous" and "unconscionable." Unconscionable means "not guided or controlled by conscience," a term more befitting ISIS tactics than a regulatory agency trying to figure out a fair electric bill. But then, Sen. Blumenthal has never let a restriction to pertinent language get in the way of a good sound bite.

    State Consumer Counsel Elin Swanson Katz was far more measured, voicing "serious reservations" about the rate hike approved in December. She said she didn't believe CL&P proved it needed the increase it received. In consumer counsel speak, that amounts to saying it really was not that bad a decision but could have been better.

    In Connecticut - with the exception of customers of municipal utilities - electric consumers can shop around for a supplier. But no matter who you buy your electricity from, it comes with a distribution charge assessed by CL&P. That is the rate that has been debated the past few months.

    What does the increase mean? According to PURA, $7.12 per month for the average residential customer using 700 kilowatt hours of electricity, about a 5.5 percent jump.

    Getting much attention, and criticism, is the "fixed rate charge" going from $16 per month to $19.25. Customers pay that rate to be connected to the system, regardless of energy use. Critics, including Sen. Blumenthal and Ms. Katz, say the fixed rate discourages conservation, because consumers are stuck with it no matter how much they cut electricity use. They also argue it hurts those on limited incomes more because they can't lower the fixed rate through reduced energy use.

    PURA recognized, however, that CL&P has fixed expenses and so a reasonable fixed charge is appropriate. Even as consumers practice conservation and turn to alternative sources of electricity, CL&P still needs to maintain a distribution system.

    PURA hardly gave CL&P everything it wanted. The utility asked for a 60 percent increase in the fixed rate, but PURA granted only a 20 percent hike. More than half the estimated rate increase consumers face is tied to power use, which means they can trim the size of their increase by using less power. We expect many consumers will do just that.

    Other evidence that PURA dealt fairly with CL&P is its decision to trim the "return on equity" the company wanted from 10.2 percent to 9.17 percent, keeping the rate increase down. In the first year, the return on equity is set at 9.02 percent, a penalty for the utility's poor handling of Tropical Storm Irene and the October blizzard in 2011.

    Sen. Blumenthal is calling for the Federal Energy Regulatory Commission to review why state agencies are approving increases in flat rates across the country and whether that violates federal regulations or discourages conservation. FERC has enough to do. Leave utility regulation to the states.

    In Connecticut, PURA is getting the job done, despite what the senator's chest thumping might lead people to believe.

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