CL&P rate request has become a lightning rod
Connecticut Light & Power Co. has nearly four times as many customers as United Illuminating, the state’s other major electric utility.
Yet when it comes to rate hikes – and the Connecticut politicians who care – the ratio is skewed even more heavily toward CL&P.
One year ago, UI’s request for a 33 percent rate hike sparked a letter of opposition from one state legislator.
Flash forward 12 months – into an election year – and more than 80 state and federal lawmakers have protested a pending CL&P request, which is less than UI’s in percentage terms. In fact, 16 state legislators in UI’s service area, who didn’t comment on their local utility’s request last year, are protesting CL&P’s.
Lawmakers defend their intense interest, arguing it is justified by the utility giant’s recent merger, its performance during past storms, and the high overall cost of electricity in the region.
But CL&P, which last sought a distribution rate hike four years ago, noted that the rate review process doesn’t address political arguments — a point also raised during proceedings by the head of Connecticut’s regulatory agency.
“As public servants, we cannot overlook the negative impact the company’s (CL&P’s) proposed measures would have on working families and small businesses throughout the state,” reads a letter sent last month to the Public Utility Regulatory Authority by 70 members of the Democratic majority in the state House and Senate.
Gov. Dannel P. Malloy and U.S. Sens. Richard Blumenthal and Christopher Murphy all sent letters of opposition to PURA, and released them in press statements.
“PURA must reject this unconscionable and unacceptable increase in CL&P’s fixed rate charge, and go a step further,” wrote Blumenthal, who is not up for re-election this year. “It must reduce the current charge itself.”
Given the pending rate case, PURA officials could not comment for this article, said Dennis Schain, spokesman for the authority.
But PURA Chairman Arthur House, in opening comments when hearings began on the CL&P rate case on Aug. 27, cautioned all parties about recommending conclusions prematurely.
“I can’t imagine that such elected officials … would call or tell a judge how to determine the outcome of a criminal or civil case before the witnesses have been heard, before the law has been applied,” he said.
NU spokeswoman Caroline Pretyman said Thursday that, “The regulatory process for approving rates has been designed to provide an objective assessment of the costs required to provide safe, reliable power to our customers. We know many of our customers, as well as the elected officials who represent them, may have questions about our filing, but we would hope they adhere to this process, which was designed to remove politics from the decision.”
But several legislators who wrote to PURA said most of their arguments stick to basic and appropriate concerns, such as the high cost of electrical service in Connecticut.
Rep. Lonnie Reed, D-Branford, co-chairwoman of the legislature’s Energy and Technology Committee, said NU must expect more officials to be concerned, given that a recent merger made it the largest utility in New England.
Frankly, Reed also said, “United Illuminating has been working with us better,” both in addressing service concerns and in expanding renewable energy projects and other clean energy initiatives that have become a priority at the state Capitol.
“We feel warmer and fuzzier with UI,” she said, adding the concern about NU is understandable – and not a product of election-year politics. “There’s a corporate thing that happens with NU.”
And even those in UI’s service system – 17 communities in the Greater New Haven and Great Bridgeport areas – said CL&P’s rates affect businesses all across Connecticut.
“Whatever CL&P does has a ripple effect,” said Rep. Juan Candelaria, D-New Haven.
CL&P rates “should be a concern to everyone in the state,” said Rep. Robert Megna, D-New Haven.
Kevin DelGobbo, a former member of PURA, said it’s no secret in Connecticut that state legislative seats are up for election every two years.
“Regulators, really all across the country, are in the very accustomed position of knowing they have to decide controversial cases in the middle of election cycles, and that is just a fact of their life. They are used to it and I think they deal with it.”
Pretyman added that NU appreciates that legislators “may have questions about our filing, and this process allows for that participation.”
But she also noted that state utility regulators already have largely resolved one of the big questions surrounding CL&P’s recent performance record.
PURA ruled earlier this year that, over the next six years, CL&P could cover about $365 million of the costs it incurred restoring power and rebuilding its system after two severe storms in 2011.
That decision boosts rates by about 13 percent. The company’s pending request to raise its distribution rates effectively would boost the overall increase to 26 percent. The average residential customer’s bill would rise by roughly $6.75 per month.
“Nearly half of the costs have already been approved by PURA during a thorough review of our response to the historic storms of 2011,” Pretyman said. “Since that time, our customers have begun experiencing the benefits of our targeted, long-term investments in the electric system, as 2013 was our best reliability performance, with fewer and shorter power interruptions.”
UI last year requested a 33.6 percent rate increase, and was granted 16.5 percent.
CL&P, which serves 1.2 million customers spread across 149 cities and towns, last received a distribution rate increase in 2010. As part of the state-approved merger in April 2012 of its parent company, Northeast Utilities, with Boston-based NStar, NU agreed to freeze its distribution rates until December of this year.
CL&P faced heavy criticism of its response to the 2011 storms. Hundreds of thousands of customers lost power for more than a week after an August tropical storm and an October nor’easter
And while state panels questioned the utility’s preparedness, they also acknowledged CL&P has taken several steps since then to improve storm response. These include enhanced tree-trimming, other system improvements, new training procedures and better communication with municipal and state officials.
One issue tied to those storms, though, still is pending before PURA.
Attorney General George Jepsen has sought “meaningful” penalties over CL&P’s response.
Jepsen is pursuing $28 million in penalties to be applied over three years, and PURA officials have determined that request will be decided at the same time the pending CL&P rate request is resolved.
“We advocate for fairness for Connecticut consumers to ensure that any rates are no more than just and reasonable, as required by law,” Jepsen said.
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