The parent companies of Connecticut’s two main electric utilities expect to record extra charges in the second quarter and into the future as a federal ruling over transmission charges appears to be coming down unfavorably to them.
The transmission return on equity is one of the principal sources of revenue for power companies, as they earn a percentage of profit based on the value of their transmission infrastructure. This rate directly impacts the bottom line on ratepayer bills.
The Federal Energy Regulatory Commission sets the rate.
In September 2011, attorney generals in New England states objected to FERC setting an 11.14 percent return on equity rate for Connecticut Light & Power of Berlin and United Illuminating of New Haven, among others. The attorney generals argued the rate was too high.
After years of legal back and forth, FERC appears to be leaning toward reducing that rate to 10.57 percent, although a final decision is pending an official review.
Because of this and other FERC indication in the transmission case, CL&P parent Northeast Utilities told shareholders it expects to record a charge of 10 cents per share in the second quarter alone, according to an NU filing with the U.S. Securities & Exchange Commission.
UI parent UIL Holdings Corp. also told shareholders it expects to record extra expenses as a result of the ruling but did not provide a specific figure, according to its SEC filing.
