CL&P rates expected to drop

Thanks to the expiration of bond payments owed by Northeast Utilities, customers of subsidiary Connecticut Light & Power will likely see a decrease in their electricity bills this year and next.

CL&P is the dominant utility in Fairfield County, with the United Illuminating Co. subsidiary of UIL Corp. also providing service in the Bridgeport area.

In a 200-page ruling, the Connecticut Department of Public Utility Control allows CL&P to increase revenue by $63.4 million for the fiscal year beginning July 2010 and an additional $38.5 million in fiscal 2011.

Hartford-based Northeast Utilities had requested permission to charge an additional $133.4 million in fiscal 2010 and $44.2 million in fiscal 2011, while proposing to defer the 2010 rate increase until January 2011.

Northeast Utilities said the increases were needed for ongoing capital projects, which currently include multiple high-voltage lines connecting Connecticut to power sources in other parts of New England and Canada.

The company”™s request for a 27.5 percent distribution-rate increase was reduced to 14.2 percent, though not every rate class will increase by the same amount.

Under ordinary circumstances, the approved rates would have resulted in an increase of 2.9 percent on the average customer”™s total electric bill.  However, due to the expiration of bond payments linked to the Competitive Transition Assessment (CTA) program and changes to other rate components on customer bills, DPUC estimates the net effect on customer bills will show no increase and likely will decrease.

The expiring CTA will yield some $210 million in reduced customer charges. However, a new law passed by the Connecticut General Assembly will result in a new assessment to be placed on customer bills that will collect a portion of the reduced customer charges to fund Economic Recovery Revenue Bonds. DPUC will determine the new assessment later this year.

Among other decisions, DPUC denied a Northeast Utilities request to increase the amount of return on equity it is allowed to 10.5 percent, with the company currently allowed a 9.4 percent ROE.

DPUC did allow $2.6 million more than the company requested for tree trimming in order to provide greater service reliability for customers.

Last year, overall CL&P rates declined 6.2 percent according to DPUC.