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March 28, 2013

CL&P files to claw back $414M in storm costs

Contributed Photos Connecticut Light & Power's preparation and response for the snowstorm Nemo that hit New England in February is part of ther reason the utility believes it has improved to the point that it won't have to pay a penalty for its inadequate and deficient response to the 2011 storms.

Connecticut Light & Power on Thursday publicly confirmed to regulators and ratepayers what it told its stockholders privately weeks ago – that it wants to be repaid $414 million in storm recovery expenses. If granted, CL&P's average customer bill would climb an extra $35 annually.

CL&P incurred $462.3 million in recovery cost from five storms in 2011 and 2012, including Tropical Storm Irene, Superstorm Sandy, and the October 2011 snowstorm.

A Public Utilities Regulatory Authority investigation found CL&P was deficient and inadequate in its response to Tropical Storm Irene and the October 2011 snowstorm, and recommended the utility be penalized by not allowing recovery of a portion of those costs. CL&P is asking for $286 million for those two storms.

In addition to Irene and the October 2011 snowstorm, CL&P is asking for $156 million from Sandy, $11 million from a June 2011 storm that knocked out power to 209,000 customers, and $9 million for a September 2012 storm that knocked out power to 81,000 customers.

As a regulated utility, CL&P is allowed to recover costs associated with major service-disruption events, including bringing in outside crews and replacing damaged equipment. PURA makes the final decision on the recovery costs.

CL&P's Hartford-Boston parent, Northeast Utilities, told shareholders in its 2012 annual report ("...CL&P wants its $402M storm tab paid,'' HartfordBusiness.com, March 11, 2013) that the electric utility had done enough to improve performance in emergency situations that PURA ultimately will not assess any penalty, and the company will be allowed to recover its full storm costs.

As part of NU's agreement with state regulators to approve its merger with Boston's NStar in April 2012, any recovery costs will not be added to ratepayer bills under Dec. 1, 2014. That merger agreement also stipulated CL&P would not seek $40 million in recovery costs from Irene and the October 2011 snowfall.

CL&P estimates if the entire $414 million request is recovered, the impact on ratepayer bills will be about $3 per month, although that would increase drastically for large energy users, such as businesses.

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