CVPS, DPS agree on 2.3 percent rate increase

CVPS, DPS agree on 2.3 percent rate increase
RUTLAND, Vt. (November 29, 2007) - Central Vermont Public Service (NYSE-CV) and the Vermont
Department of Public Service today agreed to a 2.3 percent rate increase to take
effect with bills rendered in February. CVPS filed for a 4.46 percent rate
increase in May. The settlement must be approved by the Vermont Public Service
Board.
"This settlement will provide CVPS with modest but adequate funds to improve
customer service and reliability, while maintaining extremely competitive rates
compared to the rest of New England," President Bob Young said. "Working with
the DPS, we were able to reduce our initial request while committing to making
substantial additional investments in tree trimming and system upgrades, which
will benefit our customers."
Under the settlement, a residential customer using 500 kilowatt-hours per month
would see an increase of $1.65, from $71.46 to $73.11 - still among the lowest
in the Northeast.
According to the Edison Electric Institute, many customers would pay far more
elsewhere in New England. Customers of Boston Edison and Connecticut Light and
Power would pay over $100 for 500 kWh. An Nstar-Cambridge Electric customer
would pay more than $104, according to EEI.
Young said internal cost controls and CVPS's long-term power contracts with
Hydro-Quebec and Vermont Yankee have largely protected customers from
significant rate pressures facing many other utilities. While the number of
customers served by CVPS has increased from 143,500 in 1993 to 158,000 today,
the number of employees has fallen from 750 employees in 1993 to 550 today.
CVPS rates have increased only slightly in the past eight years, comprised of
just a handful of small increases and decreases. The proposed rates would be
just 5.9 percent higher than rates in 1999. The Consumer Price Index has risen
21 percent, while the CPI for energy has risen almost 85 percent between 1999
and 2006.
The rate settlement is intended to dovetail with a pending alternative
regulation plan filed by CVPS in August. The plan, which must be approved by
the PSB, includes mechanisms and incentives to encourage further cost controls
and efficiencies. In consultation with the DPS, CVPS plans to hire an outside
consultant to conduct a business process review to determine where more
efficiencies might lie.
"We want to keep rates as low as possible for our customers while providing them
with the kind of service, reliability and storm response they have come to
expect," Young said. "This review and alternative regulation plan will help us
do that."
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