Connecticut Light & Power customers will likely see a decrease in their electricity bills this year and next as a result of the expiration of bond payments owed by Northeast Utilities.
CL&P, a subsidiary of Northeast Utilities, 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 state 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.
In the first quarter, Northeast Utilities had an $88 million profit on $1.3 billion in revenue, down from $99 million in profits on $1.6 billion in sales a year ago, with the declines due both to the recession”™s impact on electricity consumption and milder weather.
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 utility is about to begin construction on a $20 million electricity substation in Westport near the Greens Farms Metro-North train station; Northeast Utilities has had to truck in a mobile substation to meet power demand in summer when town residents crank up air conditioning.
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 approximately $210 million in reduced customer charges. However, a new law passed by the state 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.
Last year, overall CL&P rates declined 6.2 percent according to DPUC.
