Despite pocketing $69 million more in profits last year than in 2008, Northeast Utilities CEO Charles Shivery termed it a “disappointing” year for the company”™s core distribution business, as Northeast Utilities asks state regulators to approve an increase in what it charges customers.
Connecticut Light & Power Co., a subsidiary of Hartford-based Northeast Utilities, is the dominant utility in Fairfield County. Northeast Utilities had just under 6,100 employees at the close of 2009, down about 110 jobs from the year before.
Northeast Utilities reported $330 million in net income in 2009, as revenue dropped 6 percent to $5.4 billion.
Connecticut Light and Power earned $19 million in the fourth quarter of 2009, compared with $123 million in the fourth quarter of 2008. For all 2009, CL&P earned $74 million up $4 million from the year before.
CL&P attributed its improved results to a rate increase that took effect in February 2009; lower operating costs; and reduced damage from storms ”“ obviously not including the snowstorm that walloped the Northeast in the closing days of last month.
Those factors were offset partially by a 4 percent decline in retail sales; higher depreciation, pension and tax expense, and the impact of higher uncollectible customer accounts.
In January, Northeast Utilities asked the Connecticut Department of Public Utility Control (DPUC) to approve a rate increase amounting to more than $200 million, beginning in 2011, though the company said that amount would be offset as bonds near the end of their amortization schedules. The company wants the increase in part to fund capital improvements to its electricity delivery system in Fairfield County and Connecticut, with Northeast Utilities facing a $1.5 billion tab for the proposed New England East-West Solutions transmission project. With Con Edison this month, Northeast Utilities announced it is joining the Coalition for Fair Transmission Policy, which intends to lobby legislators and regulators on how to best apportion the costs of such projects.
“These (rate) cases are critical in our efforts to achieve reasonable returns on the significant investments NU shareholders have made in the electric distribution infrastructure of Connecticut,” Shivery said, in a prepared statement.
Attorney General Richard Blumenthal and others counter that is robbing ratepayers of what would otherwise be their first significant rate decrease in years, and one they could use after being battered by recession the past few years.
DPUC is expected to issue a decision this summer.
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While energy use increased 1.5 percent last year among CL&P”™s residential customers after accounting for the effect of weather, commercial electricity use was down 1.4 percent and industrial power was off an incredible 16.6 percent.
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“While the other segments of our company performed well, the financial results of our four distribution businesses continued to be disappointing,” Shivery said, in a prepared statement. “Those businesses were clearly weakened by economic factors, even though we maintained tight control of our operating costs and continued to invest in the energy infrastructure needed to serve our customers and our region.”
Shivery received just under $7.8 million in compensation in 2009, down slightly from the previous two years.
The company has yet to specify any potential impact on near-term energy rates stemming from last month”™s explosion that ripped apart the Kleen Energy plant under construction in Middletown to feed electricity to CL&P for transmission to customers.
Planned for 620 megawatts, sufficient energy for the equivalent of more than 435,000 homes, the project is expected to be delayed at least a year for reconstruction, not counting any further delays from potential insurance or legal challenges.
Five men died in the Feb. 7 explosion, and a sixth died later from injuries he sustained.
The accident occurred as workers cleaned debris from inside natural gas pipes at the plant through a “gas blow” procedure, according to Don Holmstrom, a supervisor with the U.S. Chemical Safety Board.
The procedure is intended to force gas through pipes at 650 pounds per square inch of pressure, according to Holmstrom. The gas was vented into the air through pipe openings located less than 20 feet off the ground, but was somehow constrained in what Holmstrom termed a “congested area” near the main building, where it concentrated into levels sufficient to spark an explosion.
