Berlin electric utility Connecticut Light & Power had its most reliable year in 2013, experiencing its lowest frequency of power outages since the state started tracking the data in 1996, regulatory filings show.
CL&P’s success in reducing the number and length of its outages will come into play during its ongoing rate case with the Public Utilities Regulatory Authority, where the utility is asking for a $117 million revenue increase, but also faces a potential $150 million penalty for its inadequate response to 2011’s widespread power outages.
“It really comes down to the investment we have made in our system,” said Bill Herdegen, CL&P president. “We are much improved in our storm response.”
Even though critics of CL&P like the state Office of Consumer Counsel and the Connecticut attorney general have been pleased with the utility’s reliability turnaround, they remain in vocal opposition to CL&P’s proposed rate increase, which PURA will rule on in December.
In its proposal, CL&P is asking PURA for a $117 million rate increase, which includes raising the fixed customer service charge from $16 to $25.50 per month.
“Connecticut’s electric rates remain extremely high by any comparative measure,” said state Attorney General George Jepsen,. “I understand the need to upgrade infrastructure and resiliency following the major storms our state experienced, and I recognize that CL&P’s storm responses have improved. Nevertheless aspects of this application appear to be excessive, including the proposed increase to the fixed customer charge for residential customers and the rate of return on equity.”
The CL&P rate case also includes a $114 million increase for the utility’s storm costs and upgrades to its system resiliency. PURA already has approved that amount, so it will be added to CL&P’s new rates.
The Office of Consumer Counsel believes that $114 million is enough for CL&P, and that PURA shouldn’t grant the other $117 million request, which also includes proposals to strengthen the utilities’ system infrastructure against future outages.
“We did push back on that because they asked for more money with the details to come later,” said Rick Sobolewski, OCC supervisor of utility financial analysis. “The amount of pre-approved items is already a significant rate increase.”
The other part of the rate case is whether PURA will assess any penalty against CL&P for its 2011 responses to Tropical Storm Irene in August and the October nor’easter, both of which left more than 675,000 customers without power in each instance, some for up to 11 days. A PURA investigation into the utility found its response deficient and inadequate, but the agency deferred assessing any penalties until CL&P filed for its next rate case.
Officials including Jepsen have called on PURA to assess a fine up to $150 million, but the agency gave CL&P a chance to go without a penalty if the company improved its outage prevention and storm response.
“We have already paid the penalties associated with that storm,” said Herdegen, referring to the $40 million CL&P paid as part of the regulatory approval of the 2012 merger of its parent Northeast Utilities with Boston-based NStar. “That (storm) should not be a big factor in this rate case.”
In 2011, the metric determining CL&P’s frequency of outages — System Average Interruption Frequency Index — was 3.15 outages per customer and the duration of those outages was 8,279 minutes, both of which were the worst figures since the data started being tracked in 1996.
Two years later, the frequency number had fallen to an all-time low of 0.93 outages per customer while the duration hit 206 minutes, which was the fifth lowest since 1996.
The outage data so far in 2014 is even better than last year, Herdegen said, although those figures won’t be final until 2015.
“After 2011, we put a lot of effort into our storm planning and our storm response,” said Herdegen, who took over as president in 2012. “We spend a lot of time on these improvements.”
The changes included adding automation to CL&P distribution infrastructure so outages would be as localized as possible; performing more enhanced tree trimming to prevent branches from falling on wires; and upgrading the technology at its storm response center to better track repair crew movements and estimated restoration times.
CL&P did benefit from having fewer major storms in 2013, which helped keep the frequency and duration of outages down. However, even not counting major storms, last year was nearly the best performance year for CL&P since 1996.
Factoring outage data without major storms is a standard industry metric of how reliable utilities actually are, since major storms can skew data for one year or another. That way, the metrics measure how utilities prevent and respond to incidents like car accidents into poles, trees falling on wires, birds shorting out lines, and general equipment failures.
Not counting major storms in 2013, CL&P’s outage frequency was 0.77 outages per customer with the average duration of 83 minutes, both the second lowest figures since 1996. In 2011, those numbers were 0.94 outages and 133 minutes.
“Whenever they have huge storms, they typically don’t include them for benchmarking purposes because it is such an outlier,” Herdegen said.
Orange utility United Illuminating also had a very reliable year in 2013. Although UI wasn’t criticized as much for its 2011 storm responses, the utility has improved its outage management since then.
In 2013, not counting major storms, UI’s frequency of outages was 0.58 per customer, which is tied for its best year since 1996; duration of those outages was 51 minutes, which is the third best since 1996.
“When those types of events happen, we know how to handle them, and we know how to handle the larger storms as well,” said UI spokesman Michael West. “Our customers have enjoyed strong reliability for many years.”n
