CL&P cites big storms' costs, seeks rate hike
If approved, the average customer would pay $3 a month more.
The power company said the storms, including Superstorm Sandy and the October 2011 Nor’easter, were some of the most devastating events in Connecticut history, causing massive damage that in some cases, required entire sections of CL&P’s electrical distribution system to be completely rebuilt.
“The damage from these natural disasters and the response to complete repairs was extraordinary and unlike anything in CL&P history,” said Bill Herdegen, CL&P President and chief operating officer.
“Typically, storms of this magnitude strike years or decades apart, but in 16 months, we experienced four of the company’s ten most devastating storms. Responding to Mother Nature’s wrath is a necessary, but costly part of the utility business.”
In its filing today, CL&P initiated the regulatory review process of the costs associated with the 2011 and 2012 major storms that totaled $462.3 million in costs, of which the company is seeking $414 million recovered over a six-year period.
About $175 million of the total cost is associated with the October 2011 Nor’easter and $156 million for Superstorm Sandy in 2012.
The remaining costs are connected with Tropical Storm Irene in 2011 and two other major storms – in June 2011 and September 2012.
CL&P said that of the $462.3 million in total costs, it seeks $414 million to be recovered; that excludes $8.3 million that is already set aside in a storm reserve fund, and $40 million agreed to in the terms of a 2012 NU merger agreement.
For a typical residential CL&P customer, the request, if approved, would result in a rate increase of about $3 per month.
Rates will not change until Dec.1, 2014.
As a regulated utility, CL&P is allowed to recover costs associated with such storms.
These costs include bringing in outside line and tree workers, replacing damaged equipment and staffing the around-the-clock response effort.
In Superstorm Sandy alone, 2,900 outside line workers assisted CL&P crews to replace more than 2,700 poles, more than 2,000 transformers and 105 miles of wire.
The CL&P filing, is about 600 pages, and includes testimony from company officials detailing the damage from the five storms and the widespread outages that resulted. It reports on the steps CL&P took to prepare for each of the storms, as well as the management of each restoration effort.