Darien electric bills to rise with approval of CL&P rate hike
Updated 6:45 am, Tuesday, November 18, 2014
The spike in electric rates approved this week for Connecticut's two utilities drew disappointment and resignation from consumer advocates worried about the impact on elderly and poorer residents.
"In a state where residents are already paying some of the highest electricity rates in the country, any rate increase is bad, but it's particularly hard on the elderly and those living on a fixed income," said Nora Duncan, state director for AARP.
"We worry about seniors who may put their health at risk by turning off the heat, cutting back on their medications or even skipping meals in order to afford their electric bill," Duncan said.
The increase for CL&P customers -- including those in Darien -- is approximately $18 monthly for the average bill. CL&P's per kilowatt hour charge will rise from about 10 cents to 12.6 cents.
For UI customers, the average bill will be about $35 a month higher. UI's rate will increase from 8.7 cents per kilowatt hour to 13.3 cents.
The new rates take effect Jan. 1 and will last six months. The increase reflects a rise in the price of electricity purchased by the two utilities.
Attorney General George Jepsen said the rate increase is "unwelcome news" for customers, but said not much could be done to prevent it.
"The increase to these rates is, without a doubt, unwelcome news for both CL&P and UI customers, but these rates are a direct reflection of the cost of electricity generation in our wholesale generation market," Jepsen said.
Neither UI nor CL&P will make money off the new rates because both companies are passing the increased generation costs to consumers.
"The rates are the product of a procurement process that is overseen by PURA; they are essentially a pass-through and do not contribute profits to either utility company. PURA's approval of these rate increases is not unexpected," Jepsen said.
In its decision, PURA said "the authority finds that the six-month rate will provide price stability and facilitate competition," adding regulators found the new prices "to be reasonable."
An earlier $221 million rate hike request from CL&P for distribution of power -- which is how utilities makes money -- is still pending before PURA, and has prompted considerable opposition from consumer advocates.
Jepsen said he will press PURA to reduce that proposed rate increase. The utility requested the money in order to harden infrastructure so it can better withstand future storms.
"I will continue to urge PURA to reject portions of CL&P's distribution rate application that are more than just and reasonable," Jepsen said.
In a statement, CL&P, a subsidiary of Northeast Utilities, said the cost of electricity is increasing across the region because of constraints in the supply of natural gas.
"The current spike in the cost of electricity is not only affecting Connecticut, but all of New England, since more than half of the region's electricity is now produced using natural gas," CL&P said.
"Although natural gas remains an abundant and inexpensive fuel, regional pipeline limitations and the growing dependency on gas to produce electricity are pushing prices higher," CL&P said.
Customers have the option of shopping for electricity in the third-party market, but experts warned to be careful.
"If they choose to do so, understand all of the terms, conditions and fees before signing up," Jepsen said. "For many, the standard service rate will remain a competitive rate and may be the best option."