New Power Market System Will Benefit CL&P Customers

BERLIN — A comprehensive settlement to establish a new auction market system to compensate power plant owners will be beneficial to customers of the Connecticut Light and Power Company (CL&P) as the company continues its efforts to stabilize electric rates in Connecticut.

CL&P, the Connecticut Department of Public Utility Control, Connecticut Office of Consumer Counsel, and others have joined in the settlement, which will provide a cheaper and more reliable alternative to the originally proposed program known as Locational Installed Capacity or LICAP.

“Compared to the original proposal, the new program is not a perfect solution, but it is one that will mean a cumulative savings to CL&P customers of approximately one billion dollars over the first three and a half years of the program,” said Raymond P. Necci, president and chief operating office, CL&P. “This compromise settlement underscores our commitment to controlling customer costs in Connecticut and is a much more acceptable alternative to LICAP.”

If approved by the Federal Energy Regulatory Commission (FERC), the settlement will resolve a three-year dispute over the best way to ensure that power plant owners across New England will build enough new plants to meet peak power requirements and will replace old, inefficient plants that cannot respond at times of peak power usage. It includes measures to guarantee electric generating plants will be available when they are most needed and penalized when they fail to meet that need.

The agreement, which is proposed to take effect on December 1, 2006, remains preliminary pending final approval by FERC. The settling parties have asked for FERC approval by June 30.