The Connecticut Light and Power Company (CL&P) announced that it has filed for rate changes with Connecticut's Department of Public Utility Control (DPUC) as part of the next phase in the state's electric utility restructuring process.
These filings are provided for under Public Act 03-135, An Act Concerning Revisions to the Electric Restructuring Legislation, which was passed by an overwhelming majority in the General Assembly during the 2003 legislative session, and recently signed into law by Governor Rowland. The filings lay out the framework for Transitional Standard Offer (TSO) service for customers who choose not to obtain electric service from a competitive supplier. TSO will be similar to the current Standard Offer service provided by CL&P.
CL&P is requesting to set the TSO rate equal to the total rate levels for December 1996, an increase of approximately 11.1 percent over the current Standard Offer rate, as provided for by the statute. In inflation-adjusted dollars, today's Standard Offer rate is approximately 27 percent lower than total rates were in 1993. TSO service will consist of the same components as the current Standard Offer service and will go into effect on January 1, 2004. For a typical Connecticut home using 500 kilowatt-hours of electricity a month, the increase in CL&P rates would be approximately $6.25 per month.
Also, CL&P provided notice to the DPUC that in approximately 30 days it will file the required rate case and four-year service plan to provide the details of two major components of the TSO rate, distribution and transmission services. The distribution and transmission rate filing will provide detailed information showing that the rate increase is necessary to refurbish CL&P's electrical infrastructure and enable the company to continue to deliver safe and reliable power to its more than 1.1 million customers. The distribution and transmission rate increase will be included as part of the overall TSO rate increase and does not represent an incremental change in overall TSO rates.
"This request comes at a critical time in the ongoing restructuring of Connecticut's electric industry," said Lee Olivier, president of CL&P. "At CL&P, we believe that rates should be increased only when absolutely necessary, and that is why we have not requested an increase in base rates since 1992. Today's customers demand a higher level of service, and the increase we're requesting will provide that through systematic infrastructure upgrades, system refurbishment, and enhanced maintenance.
"By strategically investing approximately $1 billion over the next four years in Connecticut's economy, we will increase power quality and enhance the reliability of CL&P's distribution system by decreasing both the frequency and duration of outages for our customers," said Olivier.
Over the next several months, CL&P expects that the DPUC will undertake an extensive process to determine the appropriate rates for the company's customers. In a rate case, the DPUC generally will conduct an on-site audit of the company's financial documents, hold extensive hearings, and request any information deemed necessary to justify the requested adjustment in electric rates.