$30 Million Refund Heading To Connecticut Power Customers

Oct 21 - Hartford Courant (CT)

Federal energy regulators have ruled that transmission rates in New England are too high and ordered power companies like Connecticut Light & Power and United Illuminating to issue in estimated $70 million in refunds to ratepayers.

The decision comes more than three years after representatives from all six New England states filed a complaint to the Federal Energy Regulatory Commission about the companies' 11.14 percent base profit margin.

Officials from the various states argued that changes in the economy and capital markets had eroded any justification for the company's high return on equity, which regulators approved in 2006.

In a statement, Arthur H. House , commissioner of the Public Utilities Regulatory Authority , called the ruling "is a victory for Connecticut electric ratepayers," and estimated that the refund is requires companies to make could amount to as much as $30 million because Connecticut pays a large portion of the region's transmission costs.

The companies listed in the case are Bangor Hydro-Electric , Central Maine Power Co , National Grid , NextEra , NSTAR Electric and Gas Corp. , Northeast Utilities Service Co. , The United Illuminating Co. , Unitil Energy Systems , Fitchburg Gas and Electric Light Co. , and Vermont Transco .

They have 30 days to provide refunds with interest calculated for the 15-month period from Oct. 1, 2011 , to Dec. 31, 2012 .

The decision, released on Thursday, also set an upper limit for earnings at 11.74 percent, which accounts for the base rate plus any incentives given to companies.

In August 2013 , an administrative law judge ruled that the approved profit margin for investments that power companies make into transmission upgrades and projects was "unjust and unreasonable," and found that the proper rate would be 9.7 percent.

Regulators reviewing that decision chose to change the rate to account for long-term growth projections. Participants in the case agreed to pin the long-term growth during the period in question to the growth of the United States' gross domestic product, which was 4.39 percent.

In a statement on the ruling, Gov. Dannel P. Malloy said, "Thanks to the Public Utilities Regulatory Authority's careful scrutiny of charges, our families, seniors and businesses will see a refund and will not be burdened with additional costs that drive up electric bills."

The New England states, including Connecticut regulators and Massachusetts' attorney general, are continuing their push to lower the transmission profit margins even below the rate set in the recent ruling.

Federal regulators are not stopping with New England .

Also last week, officials set a hearing to review a complaint over high transmission rates in the Midcontinent Independent System Operator's territory, which covers a large swath of the Midwest.

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