CVPS, DPS reach rate agreement

CVPS, DPS reach rate agreement
RUTLAND –
Central Vermont Public Service (NYSE-CV) and the Vermont Department of Public Service
have reached a settlement in the company’s pending rate case, agreeing to
a 3.73 percent increase effective Jan. 1, 2007. CVPS had filed for a 6.15
percent increase last spring, to be effective Feb. 1, 2007. A settlement agreement has been filed with the Vermont Public Service Board,
which must review and approve the settlement before it can become effective.
“This
settlement provides the company with adequate cash flows and an opportunity to
earn a fair return, while keeping rates very competitive,” President Bob
Young said. “With utilities seeking double-digit rate hikes across the
Northeast, we are proud of our ability to control costs and provide our
customers comparatively low rates, and a high level of service.”
Under the settlement,
a residential customer using 500 kilowatt-hours per month would see an increase
from $68.01 to $70.56. The same customer would pay up to $106.90
elsewhere in New England.
Due to cost controls
and stable long-term power contracts, CVPS has had just one rate increase in
the past seven years, a 3.95 percent increase in 2001. CVPS’s rates were
reduced 2.75 percent in 2005.
“We
appreciate the DPS’s efforts to reach a settlement,” Young
said. “It will put the litigation of the rate case aside and allow
us to continue our focus on driving out costs, other measures to restore the
company’s financial strength, and new ways to improve reliability and
customer service.”
CVPS has moved
from among the most expensive utilities in New England to among
the lowest priced during the past decade. Driven in part by last year’s
hurricanes and problems in the Middle East, fuel prices have risen sharply
worldwide, driving up electricity prices for most utilities. In the past two
years, rate requests of up to 60 percent have been sought in New England, and
as much as 72 percent in Maryland.
In Vermont,
recent rate requests by other utilities have ranged from just under 10 percent
to nearly 23 percent. CVPS customers have been largely protected from the
increase in energy prices by fixed-price contracts with Hydro-Quebec and
Entergy-Vermont Yankee.
CVPS agreed to
reduce its request primarily by shrinking its proposed allowed return on equity
from 12 to 10.75 percent. The Company’s request was further reduced
when it agreed to separately pursue a request to recover $4.6 million in unplanned
power acquisition costs following Hurricanes Katrina and Rita in late 2005.
CVPS, founded in
1929, is Vermont s largest electric utility, serving more than 152,000
customers.
Forward-Looking
Statements
Statements
contained in this report that are not historical fact are forward-looking
statements intended to qualify for the safe-harbors from the liability
established by the Private Securities Litigation Reform Act of 1995.
Statements made that are not historical facts are forward-looking and,
accordingly, involve estimates, assumptions, risks and uncertainties that could
cause actual results or outcomes to differ materially from those expressed in
the forward-looking statements. Actual results will depend, among other
things, upon the actions of regulators, performance of the Vermont Yankee
nuclear power plant, effects of and changes in weather and economic conditions,
volatility in wholesale electric markets and our ability to maintain our current
credit ratings. These and other risk factors are detailed in CV's
Securities and Exchange Commission filings. CV cannot predict the outcome
of any of these matters; accordingly, there can be no assurance that such
indicated results will be realized. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of the date of
this press release. CV does not undertake any obligation to publicly
release any revision to these forward-looking statements to reflect events or
circumstances after the date of this press release.