Connecticut Breaking News

Connecticut Cool to Power Utility's Rate Hike Request 11/21

State Attorney General Wants Denial of Utility's Rate Increase Request 11/13

NRG, CL&P Settle Power Purchase Dispute 11/12

FERC Upholds CL&P, NRG Energy Inc. Power Contract 10/7

AARP Seeks to Join Case Against CL&P Rate Hike 9/16

Connecticut Regulators Ask FERC for Transmission Cost-Sharing 9/11

Connecticut Cool to Power Utility's Rate Hike Request

(November 21)  Two high ranking state officials are asking state utility regulators to reduce or eliminate $677 million in electricity rate increases sought by Connecticut Light & Power over the next four years.

The office of State Consumer Counsel Mary Healey is asking regulators to slash the increase to $20 million. State Attorney General Richard Blumenthal said CL&P should not receive any increase.

"The thrust of our overall complaint is the magnitude of the overall rate increase, which is completely unjustified and unwarranted and unfair," Blumenthal said Tuesday.

In a filing to the state Department of Public Utility Control, Healey's office recommended rates be cut by $7 million in the first year of the four-year rate period.

The increase CL&P is seeking would amount to an 11.1 percent rate hike over the four years, and officials in Healey's office, which represents ratepayer concerns in utility cases, said CL&P does not need such a large increase to maintain and improve the reliability of the electrical system. She and Blumenthal said CL&P's 1.1 million customers should not have to pay for such perks as the Cessna Citation V Ultra plane used by Michael Morris, the chairman and chief executive of Northeast Utilities, CL&P's parent company.

About $630,000 from CL&P goes toward the plane's upkeep, with the rest of the approximately $1.5 million cost coming from other NU operating units.

Shareholders should pick up those costs, said Richard Sobolewski, supervisor of technical analysis in Healey's office.

The company is seeking a first year increase of $135 million in 2004. CL&P officials have said the increase is needed for the company to improve the reliability of its electrical distribution system, which serves the majority of the state's electric customers. The company also said it needs to train new employees to replace some of the 40 percent of line crew workers who will be eligible to retire over the next five years.

Sobolewski said CL&P can accomplish its goals with significantly less money than it is asking for, and without compromising the reliability of the electrical grid. He said the massive August blackout that affected Connecticut and seven other states stemmed from transmission system problems in the Midwest, and has no bearing on what CL&P is seeking to do.

Blumenthal said the company is seeking its increase at a time when Connecticut consumers are already paying more for their power because of a new wholesale electricity pricing system that started in March.

Source: The Hartford Courant

State Attorney General Wants Denial of Utility's Rate Increase Request

(November 13) Attorney General Richard Blumenthal said Nov. 12 that he wants state regulators to toss out Connecticut Light & Power's application for a rate increase.

CL&P has applied to the Department of Public Utility Control to increase its rates. The DPUC said it will make a decision in December. The company provides electricity to more than 1.1 million Connecticut customers.

In a prepared statement, Blumenthal said CL&P is asking for a rate boost of $205 million over four years to pay for upgrades to its distribution system. Blumenthal argued that the rate increase is excessive and unfair because Connecticut residents will be hit with other costs attributed to deregulation during that period. He also said CL&P failed to justify the need for these increases.

CL&P spokesman Chris Riley said the company thinks its request is appropriate. He said the request would raise customer rates by 11.1 percent and return them to 1996 levels. He said if people could buy milk or movie tickets at 1996 prices they would be overjoyed and electricity should be no different.

The increase will also allow CL&P to upgrade its system and reduce the number and duration of power outages, he said.

Source: Connecticut Post

NRG, CL&P Settle Power Purchase Dispute

(November 12)  The power marketing unit of bankrupt NRG Energy Inc. said on Thursday it has reached a settlement in a power purchase contract dispute with Connecticut Light & Power.

Under the terms of the settlement, NRG's Power Marketing Inc. (PMI) unit will continue to supply power to Northeast Utilities' CL&P utility at the existing contract price through the remaining term of the power purchase agreement.

NRG Energy is a unit of Xcel Energy Inc. of Minneapolis.

The settlement also resolves NRG's appeal now before the U.S. Court of Appeals, Second Circuit, of a district court ruling in favor of a Federal Energy Regulatory Commission order blocking PMI from rejecting the CL&P contract.

PMI entered into the four-year contract to supply 45 percent of the daily power requirements of CL&P's 1.1 million customers at a fixed rate per megawatt hour in October 1999 after NRG bought four power plants from CL&P. The contract began on Jan. 1, 2000, and runs through Dec. 31, 2003.

In May 2003, NRG and its PMI subsidiary filed voluntary bankruptcy petitions in U.S. Bankruptcy Court in the Southern District of New York. In connection with its bankruptcy filing, PMI sought authority to reject and cease performance on several financially burdensome agreements, including the power purchase agreement with CL&P, which NRG has said was costing PMI about $500,000 a day.

In June 2003, PMI received approval from the U.S. Bankruptcy Court to reject the CL&P contract but has not been allowed to breach the agreement because of the FERC order.

Source: Reuters

FERC Upholds CL&P, NRG Energy Inc. Power Contract

(October 7) Federal regulators turned back another attempt by bankrupt NRG Energy Inc. to ends its electric supply contract with Connecticut Light & Power Co. last month, but they left the crux of the companies' dispute unresolved.

The question of which company is responsible for $34 million in unpaid transmission-congestion costs to the New England system operator has now been sent to an administrative law judge with a hearing set for this month.

The bill stems from costs associated with bringing electricity into areas where insufficient transmission capacity exists such as southwestern Connecticut.

As part of a group of regulations meant to standardize operating procedures for regional electric systems, the Federal Energy Regulatory Commission in December changed the way these costs are billed. Now, the expense is borne by the zone in which the congestion occurred instead of across the entire region's power grid.

Minneapolis-based NRG has a contract to supply power to CL&P at set rates that run until the end of 2003. The contract was written before FERC conceived its standard market design. NRG claims the contract language specifies that CL&P is responsible for the costs. NRG threatened to void its contract if CL&P did pay the back charges to ISO New England.

NRG filed for Chapter 11 bankruptcy protection in May, reporting $11.6 billion in total liabilities against $10.9 billion in assets.

In June, a bankruptcy judge authorized the company to terminate the contract but soon after a district court judged refused to back that decision, ruling that the court lacked jurisdiction.

In an Aug. 15 order, the commission found that, even if a public utility files for bankruptcy, the utility still must meet its obligations under the Federal Power Act.

As for the question of which company is responsible for the congestion charges, Connors said that part of the case is still pending before the commission. "An administrative law judge has been assigned to that case and the hearing is set for October," she said.

Originally, NRG claimed it would lose $78 million under the contract and would be forced to liquidate. The company has since backed off from those claims.

Documents that NRG filed with FERC show that the company now estimates it will lose $57 million if it continues to perform under the agreement through the end of the year.

CL&P's argued that either estimate of NRG's potential loss from the contract would not cause the energy supplier's $11 billion reorganization plan to fall.

The commission's recent ruling also stated that CL&P would likely suffer substantial harm if the deal were terminated because the utility would be forced to replace the power under the NRG contract with higher-priced power bought in the open market.

CL&P is the largest operating subsidiary of Northeast Utilities. Nearly all of CL&P's 1.15 million electric customers receive their electricity through the standard offer contracts. NRG provides 45 percent of the power.

The state Department "of Public Utility Control granted CL&P permission to start billing customers for some of the congestion costs and urged the company to post a surety bond so if FERC should rule in. its favor, CL&P can reimburse the ratepayers.

Source: Fairfield County Business Journal

AARP Seeks to Join Case Against CL&P Rate Hike

(September 16)  AARP has filed a petition with the state Department of Public Utility Control to be granted either party or intervener status in a case filed by Connecticut Light & Power Co. to raise its electric rates. If granted legal status in the case, AARP would have the right to present evidence against the rate hike application and to cross examine CL&P witnesses at DPUC public hearings.

AARP believes that if the state grants CL&P's application in full, the typical monthly electric bill for the utility's one million residential customers would rise by as much as 24 percent.

The rate increase CL&P is seeking would raise the average rate 11.1 percent over what residential customers paid in April. That represents an additional $6.26 a month, or $75.12 more a year. The rate hike, if approved, would take effect Jan. 1, 2004. The rate hike would be added to a new "congestion charge" imposed by the DPUC in May. In September, the charge, which has varied monthly, is $7.33. That "congestion charge" would amount to $87.96 annually at this month's rate. Combined, the increases would be $163.08 more a year, which is a 24 percent increase over what consumers paid in April.

CL&P currently is trying to get its energy supplier to absorb the "congestion charge." If the utility succeeds, customers who've paid the charge will be refunded. If not, customers continue to pay the new charge.

"AARP wants to be a party in this rate hike case not only to protect people over 50, but to protect families, as well," said Brenda Kelley, state director of AARP Connecticut, located in Hartford.

About a third of Connecticut households headed by someone 65 or older live on incomes that are so low they qualify for fuel assistance, according to standards for older couples set by state Department of Social Services. Connecticut households where the head of household is 65 or older have a median income that is only 41 percent of that of other households, according to an AARP analysis of the most recent U.S. Census data. A little more than 23 percent of households in the state, where the head of household is 65 or older, have annual incomes of less than $15,000 a year, according to the most recent U.S. Census data.

Source: AARP

Connecticut Regulators Ask FERC for Transmission Cost-Sharing

(September 11)  Connecticut state utility regulators are urging federal regulators to reject a proposal to charge most of the costs of New England power transmission upgrades to those who benefit, and instead spread the entire cost equally across the region.

At issue is how ISO New England, which runs the power grid for the region, should divvy up the costs of building new high-capacity transmission lines to move electricity throughout the area.

A coalition, including state utility regulators in Maine and Rhode Island, and Xcel Energy Inc.'s NRG unit, recently asked the Federal Energy Regulatory Commission to direct ISO New England to allocate new transmission costs mostly to the area or company that will benefit from the new lines. It proposed that 75 percent of new transmission costs be paid by beneficiaries, and the remaining 25 percent allocated to all companies across the grid.

The issue of who pays for transmission upgrades is a thorny one affecting other regions of the country. Historically, transmission lines were built in response to local customers' needs but some U.S. upgrades are now sought so independent generators can ship electricity from a region where it can be produced cheaply into other states.

The New England grid currently faces severe congestion in southwest Connecticut and northwest Vermont due to bottlenecks in transmission, while there is surplus generating power in Maine and Rhode Island, they said.

Connecticut regulators urged FERC to uphold an ISO New England plan for participant funding for most transmission upgrades. However, the plan would allocate costs regionwide for projects that involve a high-capacity line of 115 kilovolts or that would benefit the entire New England grid.

Other changes planned by ISO New England will cost Connecticut ratepayers hundreds of millions of dollars in extra annual costs, the state regulators said.

For example, the grid's plan to manage congestion through locational marginal pricing will add $220 million to rates, while a proposal for installed capacity market resources could add $450 million a year, Connecticut said.

Source: Reuters

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