Berlin electric utility Connecticut Light & Power will file for a 5.9 percent increase in its delivery rates on June 9, to make up for $116.7 million in operating deficiencies.
CL&P last filed for a rate increase in 2010. The utility then agreed to freeze its distribution rates as part of state regulators approval of the merger of its parent company Northeast Utilities with Boston-based NStar in April 2012. The new rates signal an end to that freeze and would be effective on Dec. 1.
Included in the rate increase request will include recovery of storm costs already approved by the Public Utilities Regulatory Authority. PURA approved the recovery of $365 million in CL&P storm costs over a six-year period, and the first year will include $89.5 million of that cost.
CL&P originally asked for $414 million in storm recovery costs and has asked PURA to reconsider its ruling limiting that recovery to $365 million. If that ongoing appeal is successful, then the storm cost recovery could rise.
PURA also will decide with this rate case whether CL&P should be assessed a penalty for its response to the two major storms in 2011, which PURA called deficient and inadequate. Attorney General George Jepsen said CL&P should face a penalty approaching $150 million, but PURA said CL&P could avoid any penalty if the utility proved it had significantly improved its emergency preparation and response.
The bulk of the reason for the rate increase request is CL&P’s investment in a stronger infrastructure, including better poles, wires, and transformers.
“Connecticut’s electric rates remain extremely high. Any and every proposal to increase those rates must be thoroughly scrutinized,” Jepsen said in a press release. “While I understand the need to upgrade infrastructure and resiliency following the major storms our state has experienced, every proposed expense must be – and will be – carefully reviewed and evaluated.”
The distribution rate increase CL&P is seeking is only a portion of the costs on customer bills. Other major costs include the transmission rate (set by the federal government) and the generation rate (determined by PURA or a customer’s contract with an alternative supplier), along with minor costs such as taxes and fees.
If CL&P is successful in its entire 5.9 percent rate increase request, the utility estimates the average residential customer’s bill would rise $6.76 per month.
