DPUC Opens Hearings On CL&P Rate Increases

By Diane Carponi

Associated Press

NEW BRITAIN –– State utility regulators Tuesday opened several weeks of hearings into Connecticut Light & Power Co.’s plans to increase rates to pay for distribution upgrades and to train new staff.

These plans are part of a larger proposal to increase rates 11.1 percent over four years –– the first increases since the legislature capped rates in 1998.

CL&P leaders said the rate increases are needed to improve the distribution infrastructure, 40 percent of which is 40 years or older. The improvements would include equipment that could be fixed by remote operation if there were a power outage.

Such technology would have put the lights on five or six hours sooner during the blackout in August that plunged most of the Northeast into the dark for a day, said CL&P’s President and Chief Operating Officer Lee Olivier.

The increase, if approved, would cost the average CL&P household an additional $6.50 a month.

The Department of Public Utility Control (DPUC) is slated to rule by December 15. The new rates would take effect January 1.

Agency chairman Donald Downes said the DPUC would follow the legislature’s new cap on rates, but he acknowledged that many changes to the electricity business could spell bigger bills for consumers.

Downes and other state leaders are fighting federal plans that would make customers pay for congestion on power lines and other new policies.

At the same time, Downes acknowledged that the distribution system needs to be upgraded. “This is one piece of a considerably larger story,” Downes said.

CL&P leaders said plans to improve the distribution system were formulated well before the August blackout.

“This is no attempt to capitalize on that,” said Cheryl Grise, president of the utility group for Northeast Utilities, CL&P’s parent company.

The company also needs to hire and train new linesmen and other workers to replace workers who are slated to retire in the next several years, Olivier said. The training takes years, including hands-on work on the road with experienced linesmen in all kinds of weather and conditions.

The plans to improve the infrastructure, hire and train new workers. and to and use new technology would cost about $133.5 million and increase rates about six percent, Olivier said.

The remaining five percent of the rate increase would come from increased costs to buy power. Rates would increase from the current five cents per kilowatt hour to 5.48 cents, Olivier estimated.

The exact amount of the increase is not yet known, since CL&P would have solicit bids from power generators. If bids come in high, the costs could increase for consumers.

Altogether, CL&P’s infrastructure and hiring plan would act as an economic stimulus to the state and have a value of about $1 billion, according to a study done by the Connecticut Center for Economic Analysis at the University of Connecticut.

CL&P improvements would create jobs, save businesses money, increase tax revenues, and add to the gross state product, the study said.