CL&P rate increase to recover $365M in storm costs

As loud as both the applause and complaints were following Connecticut Light & Power Co.’s response after Hurricane Irene and Sandy, the power company won initial approval Monday to recover $365 million in storm-related costs by increasing its rates for customers.

In a draft ruling released Feb. 3, the Public Utilities Regulatory Authority approved a six-year rate increase, which would allow CL&P to recover 78 percent of its recovery expenses following the five major storms in 2011 and 2012.

PURA, under the Department of Energy and Environmental Protection, is statutorily charged with regulating the state’s utility rates and services. A final ruling is expected Feb. 19.

More than 3 million CL&P customers lost power during the five storms in 2011 and 2012 ”“ some for as many as six days ”“ sparking public outrage. However official reviews by PURA show CL&P responded in a generally acceptable manner. Trade association Edison Electric Institute even recognized the company’s Hurricane Sandy response with an award.

Yet CL&P is not without its critics. Following CL&P’s initial request to recover storm damages, state Attorney General George Jepsen called for “meaningful” penalties as an incentive for the company to improve its response, which he said included some reports of withholding critical information.

The company originally requested a reimbursement of $414 million, which would have increased the average customer’s bill by $3 a month.

“CL&P has a history of promising improvement, but then slipping back into laxity after the immediate uproar has passed,” Jepsen wrote in a 54-page brief to PURA in 2012. “The authority should keep the pressure on CL&P to make a sustained effort to improve its management before the next rate case two years down the road. Two years is a long time, and Connecticut may well see additional severe weather events during that time.”

“Putting the company on notice of the penalties PURA intends to impose should provide CL&P with strong incentives to improve its performance,” he added.

The costs of the storms, as reported by CL&P, are listed below.