May 15, 2007
CVPS seeks 4.46 percent rate increase in
2008
RUTLAND, Vt. – Driven largely by increased transmission
and power costs and reliability improvements, Central Vermont Public Service
(NYSE-CV) today filed for a 4.46 percent rate increase to take effect next
February.
Under the
proposed change, a residential customer
using 500 kilowatt-hours per month would see an increase from $71.46 to $74.65.
Similar customers elsewhere in New England pay over $100.
“Our increased costs relate
in part to changes in wholesale power market prices and transmission costs,”
President Bob Young said. “We are
also spending more on customer service and reliability
improvements.”
Young said the company
increased its capital budget, largely for reliability improvements, from $18
million in 2006 to $26 million in 2007, and expects to maintain the higher
spending in coming years. “That is
critical to providing customers the reliability and service restoration levels
they have come to expect,” Young said.
“Our stable, long-term
power contracts have to a great degree protected our customers from rising
energy costs over the past several years,” Young said. “Recently, however, we have experienced
a decline in the prices we receive from the sale of our excess energy into the
wholesale market. That has resulted
in a net increase in our overall power costs.”
CVPS rates have increased
at about one-sixth the rate of inflation in the past eight years, with just a
handful of small increases and decreases in that time. Overall, current rates
are just 3.5 percent higher than in 1999.
The consumer price index has risen 21 percent, while the CPI for energy
has risen 85 percent in the same time period. “Even with this request, our rates will
remain very low compared to major utilities in New England,” Young said.
CVPS today also formally
notified the Vermont Public Service Board that it hopes to file an alternative
regulation plan in the near future.
The company has been talking with the Vermont Department of Public
Service and others about the plan.
It will include mechanisms and incentives to encourage further cost
controls and efficiencies.
“Alternative regulation can
improve financial stability, ensure funding for customer service and reliability
improvements, and increase transparency and accountability to our customers,”
Young said.