Amid public anger and a formal government review of Connecticut's electric utilities following two widespread power outages in four months, the state utility regulators announced Monday more than half of the utilities' customers will soon see a break on their light bills.
The Public Utilties Regutory Authority (PURA) approved requests by Berlin's Connecticut Light & Power and New Haven's United Illuminating to lower the standard service generation rate charged to customers, beginning Jan. 1.
The generation rate is one of a handful of charges on customers' bills, but typically makes up more than half of the total bill amount.
The charge reflects power plants' costs in producing electricity.
Following the PURA approval Monday, CL&P's new residential generation rate will be 8.279 cents per kilowatt hour, a 12.7 percent decrease from this year's electric generation rate. Depending on how much electricity a customer uses, the savings will be about $9 per month.
United Illuminating's new generation rate starting Jan. 1 is 8.727 cents per kilowatt hour, a 17.8 percent from this year's generation rate. Again, depending on usage, the savings will be about $13.50 per month.
This is the second year in a row PURA decreased the electric generation rates. The 2011 rates reflected a 7.8 percent decrease for CL&P and a 1.5 percent decrease for United Illuminating over the 2010 rates.
PURA noted in its announcement that generation rates have declined steadily since 2006 as CL&P and United Illuminating were able to lower those rates because of lower natural gas prices and improvements in the transmission system.
However, the new rates are affecting fewer utility customers. Because Connecticut is a deregulated state, residential, commercial and industrial customers can opt out of the utilities' standard service rate and switch to a retail electricity supplier that can offer lower rates than the standard utility rate.
Out of Connecticut's 1.5 million residential customers, 53 percent still use the utility standard service rate, according to PURA. Roughly 47 percent of business customers still use the utility standard service rate.
Neither CL&P nor United Illuminating see any revenue from the generation rate, as the utilities pass the money along from their customers eventually to the power generation plants. CL&P and United Illuminating make their money from the transmission and distribution rates on customers' bills.
PURA and the Federal Energy Regulatory Commission determine the transmission and distribution rates for CL&P and United Illuminating, and those rates for 2012 will be set sometime in December.
As PURA sets those rates next month, the utilities - particularly CL&P - are facing staunch public criticism over the widespread power outages caused by Tropical Storm Irene in late August and the pre-Halloween snowstorm. Those outages left more than three-quarters of a million customers without power, some for more than a week.
Gov. Dannel Malloy launched a formal review of CL&P's responses to the storms following the October outages, performed by Witt Associates of Washington, D.C. PURA also launched a review of the outages. In addition, CL&P is conducting both an internal and independent third-party review of its performances.