Authority trims CL&P planned increase

The state Public Utilities Regulatory Authority on Monday released a draft decision reducing by more than $100 million the increase in electric distribution rates originally sought by Connecticut Light & Power Co. for all classes of customers.

PURA’s draft ruling would allow the utility to add $130.2 million to its revenues, an increase that still prompted consumer advocates to issue warnings about resulting high electricity rates starting Jan. 1.

CL&P had proposed increasing the monthly service charge — the amount that most residential customers must pay regardless of consumption — from the current $16 to $25.50. The draft ruling would allow an increase in that fixed rate to $19.25 monthly.

Overall, an average residential customer using 700 kilowatts of electricity would see an increase of approximately $7.12 per month, PURA said.

Parties to the PURA proceedings will now have the opportunity to file comments or make oral arguments on the draft decision, PURA said.

In response to the announcement, Attorney General George Jepsen said he was pleased with the draft reducing the company’s request to a more “reasonable level in line with other utilities” in the state. He said his office is still reviewing the decision.

Jepsen said, however, he is concerned that the increase to the residential customer service charge, though less than CL&P requested, will disproportionately affect low-income customers.

“I believe it should be held flat,” he said in a news release. “All CL&P customers will still experience a significant increase in their rates as a result of this decision, and I anticipate filing additional comments with PURA prior to its final decision later this month, as I believe these further reductions, and possibly additional reductions, are appropriate.”

CL&P’s June 9 application for a rate increase proposed additional revenue for the utility of $231.6 million and a 10.2 percent return on equity, which is a measure of the profit a company has generated with the money invested by shareholders.

On Sept. 22, the request was revised to $221.1 million and reduced the requested return on equity to 9.17 percent.

PURA’s ruling allowing $130.2 million included some previously approved costs associated with 2011 and 2012 major storms. The base allowed return on equity 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, PURA said in a news release.

The CT Roundtable on Climate and Jobs, a coalition of labor, environmental and religious groups, was critical of the draft decision. State Sen. Martin Looney (D-11th District), Consumer Counsel Elin Katz, AARP Advocacy Director John Erlingheuser and Connecticut Consumer Action Group Executive Director Tom Swan will hold a press conference at 1 p.m. today at the state Capitol to warn customers about high electricity rates this winter.

They will advise consumers to budget for higher bills, take steps to conserve energy, and to use caution when shopping for better prices from electric suppliers, the consumer council said in a news release.

Both CL&P and United Illuminating, the state’s two major electric utilities, had announced sharp increases in electric prices for Jan. 1.

The PURA ruling states that the revenue levels approved are just and reasonable, and should provide CL&P sufficient funds to engage in significant capital improvements to upgrade its distribution system and continue to modernize its systems, processes and workforce. Monday’s draft decision also states that the approved level of revenues will provide CL&P with sufficient revenue to maintain and operate an electric distribution system and provide a safe, adequate and reliable service to its 1.2 million Connecticut customers, while allowing a reasonable profit.

The draft ruling approves a $253 million capital spending budget, finding that this level of spending is necessary for safety, reliability and maintenance. The ruling also includes system resiliency spending, which is expected to reduce the severity and frequency of outages to customers in future weather-related events, and authorizes the initiation of new resiliency programs, subject to PURA review and approval of spending levels.

Other major changes to revenue increases that CL&P had requested include reductions in cash working capital, depreciation expenses, and operations and maintenance expenses.

Written comments on the draft decision should be sent to PURA by 4 p.m. Dec. 8. Oral arguments will be heard at 9 a.m. Dec. 12 at the authority’s offices at 10 Franklin Square, New Britain, and the matter is set for a final vote before PURA’s commissioners on Dec. 17.

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