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CL&P and UI ordered to refund $30M

Thursday, October 16, 2014

The Federal Energy Regulatory Commission (FERC) has ruled electric ratepayers will receive a $30 million refund from the parent companies of utilities Connecticut Light & Power (CL&P) United Illuminating (UI) because of overpayments for transmission charges.

FERC reaffirmed last week its June decision to lower the return on equity that New England utilities receive from their transmission infrastructure from 11.14 percent to 10.57 percent. Ratepayers across New England will be awarded $70 million as a result of the difference with Connecticut’s split as $30 million.

The decision was in response to complaints made in 2011 by New England regulators and consumer advocates – including the Connecticut Public Utilities Regulatory Authority – that the 11.14 percent return on equity was unjust and unreasonable. After the June ruling, FERC decided to wait until it completed one more study on return-on-equity methodology, which it did last week.

The utility parent companies – CL&P’s Northeast Utilities and UI’s UIL Holdings – have 30 days to file a plan on exactly how to return the money to ratepayers.

The utilities argued transmission projects often run in the billions of dollars, with a high amount of risk, and the end result is electricity that flows more freely and reliably around the region, with the added benefit of linking renewable energy sources with places with high demand for renewable electricity, such as Maine wind farms providing power for Boston and Connecticut.

“We appreciate that FERC recognized the importance of investing in the transmission system as we build out more renewables across the country and here in New England, but we’re disappointed that the case continues to leave many issues unclear that help to balance the risk involved in investing in the nation’s transmission network — namely the certainty of fair returns which reflect the higher risks,” NU spokesman Frank Poirot said.