GMP files cost of service study, rates to increase 1.9%

GREEN MOUNTAIN POWER FILES COST OF SERVICE STUDY FOR
1.9 PERCENT RATE INCREASE
COLCHESTER -- Green Mountain Power (NYSE: GMP) has filed its
cost-of-service study supporting the implementation of a January 2005 rate
increase of 1.9 percent, pursuant to a plan previously approved by the
Vermont Public Service Board (VPSB). This will be the first increase for
Green Mountain Power customers in four years.
"Our success in controlling costs and managing the business well has meant
that our customers have not had an increase in rates since January 2001.
During those four years, the consumers' price index has risen 9.1 percent
and electricity prices across the nation have gone up 10.6 percent. While
it would be preferable to continue without an increase, we're pleased that
we have been able to limit the increase to 1.9 percent while continuing to
provide efficient, reliable electric service," said Christopher L. Dutton,
president and chief executive officer of Green Mountain Power.
In late 2003, Green Mountain Power received approval from the VPSB for a
three-year rate stability plan. That plan included a freeze on rates in
2004, and increases of 1.9 percent and 0.9 percent in January 2005 and
2006. Today's filing includes a cost-of-service study demonstrating the
need for the rate increase, as required by the plan. The filing is subject
to review by the Public Service Board.
The major factors driving the need for the rate increase in 2005 include
the requirement that the Company recover past energy conservation
expenditures, rising transmission costs, and the loss of deferred revenues
from a previous regulatory ruling.
"One major reason we have been able to keep our rates low is that we have
aggressively pursued ways to stabilize power supply costs. Our contract
with Morgan Stanley, the sale of the Vermont Yankee nuclear plant and
subsequent contract for purchased power from the plant and the power
contract with Hydro Quebec all help shield our customers from the
increases in market power costs that New England is now experiencing,"
explained Mr. Dutton. "Overall, the current rate arrangement approved by
the VPSB will mean that our customers will have experienced four years
without a rate increase and two years of minimal increases - 1.9 percent
in January 2005 and 0.9 percent in January 2006. This period of rate
stability, during a time of sharply rising energy costs, has given our
customers a competitive edge."
The 2005 rate increase would add $1.59 to the monthly bill of an
average residential customer using 650 kilowatthours a month,
moving it from $83.72 to $85.31.
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