The Public Utilities Regulatory Authority on Monday preliminarily approved a $130 million increase in the distribution rates of Berlin electric utility Connecticut Light & Power, a significant reduction in what the company had requested.
CL&P originally asked for a $232 million increase in June but later revised that number to $221 million in September. That figure included amounts already pre-approved by PURA in previous cases, such as $89 million for storm recovery costs.
“It’s important to note that there are significant expenses associated with running a large and complex electric system. Over time, it’s crucial that we continue making targeted investments in Connecticut’s electric infrastructure,” CL&P spokesman Mitch Gross said. “To that end, we are doing everything we can to secure the resources necessary to build and maintain an electric system that is stronger, more reliable and more efficient for our customers. This decision is a critical element of that effort.”
Included in the PURA ruling on Monday was the penalty assessed against CL&P for its inadequate and deficient response to two storms in 2011, that each left more than 675,000 people without power, some for up to 11 days.
Although many public officials such as the attorney general and the consumer counsel called on CL&P to face penalties of up to $143 million, PURA ruled on Monday that the penalty should be about $4.4 million. The penalty actually is based on the company’s return on equity for its distribution infrastructure, so the amount could vary when finalized. Officially, the penalty calls for CL&P’s return on equity to be reduced from 9.17 percent to 9.02 percent for one year.
CL&P previously had foregone $40 million of its storm recovery costs from those 2011 outages, as part of a deal reached to gain regulatory approval of the merger between its Hartford parent Northeast Utilities and Boston-based NStar.
Attorney General George Jepsen said in a statement Monday afternoon that trimming the rate hike request brings CL&P’s return on equity “to a more reasonable level that is in line with other utilities operating in Connecticut.”
But Jepsen said the storm penalty falls short.
“I continue to believe a larger, more meaningful penalty is warranted in this rate case,” he said.
PURA’s ruling on Monday also revised the monthly basic connection fee all CL&P customers pay to be hooked up to the system, regardless of how much power they use. CL&P had requested an increase from $16 to $25.50, but PURA decided it should be $19.25.
Overall, including the basic connection fee and the rate increase, the average CL&P residential customer should expect an increase of about $7 per month.
The draft decision made Monday will not be finalized until CL&P and all other involved parties have had a chance to respond to the ruling, including in oral arguments on Dec. 12. The final decision is scheduled for Dec. 17.
