CL&P seeks recovery of $414m in connection to restoration efforts following 5 storms

Connecticut Light and Power wants to recover $414m over a six-year period in relation to costs caused by Hurricane Sandy in 2012, an October 2011 Nor’easter, Tropical Storm Irene in 2011, and two other storms in 2011 and 2012.

Together, the five storms caused more than 3.6 million total customer outages, according to the company’s March 28 filing with the Connecticut Public Utilities Regulatory Authority (PURA).

The company requested that PURA issue a ruling that CL&P prudently incurred total storm costs of $462.3m, including $10.9m for the June 2011 storm, $111.2m for Tropical Storm Irene, $175.1m for the October 2012 storm, $9.2m for the September 2012 storm and $156m for Hurricane Sandy.

It also asked that PURA find that CL&P’s net storm costs of $414m are allowed for recovery in distribution rates, which reflects a pre-existing storm reserve fund balance of $8.3m and a $40m write-down under a previous settlement agreement.

The company said in a March 28 statement that if approved, the request would result in a rate increase of about $3 per month, effective Dec. 1, 2014, for a typical residential customer.

As a regulated utility, CL&P is allowed to recover costs associated with such storms, including bringing in outside line and tree workers, replacing damaged equipment and staffing the response effort. For Hurricane Sandy, 2,900 outside line workers helped CL&P crews to replace more than 2,700 poles, more than 2,000 transformers and 105 miles of wire.

“Typically, storms of this magnitude strike years or decades apart, but in 16 months, we experienced four of the company’s ten most devastating storms,” CL&P President and COO Bill Herdegen said in the statement. “Responding to Mother Nature’s wrath is a necessary, but costly part of the utility business.”

According to the filing with PURA, the filing relates to a settlement agreement that was approved by PURA in April 2012, and provides that CL&P’s storm costs are to be subject to review and approval in an adjudicatory proceeding.

The settlement also provides that the company’s distribution rates are to remain frozen until Dec. 1, 2014, and therefore the filing does not propose to amend distribution rates at this time, CL&P added.

Rather, the company said it seeks PURA’s approval to recover its net storm costs in future distribution rates, starting when the company’s new rates are implemented after the base rate freeze expires.

The impact that the storms had in Connecticut was unrivaled in the state’s history, CL&P said, noting that Tropical Storm Irene caused 671,789 outages to CL&P customers at its peak and required restoration to about 1 million customers.

The October 2011 Nor’easter left 807,228 customers without power at the peak and required restoration to about 1.4 million customers. Hurricane Sandy caused 496,769 CL&P customers to lose power at the peak and required restoration to 856,184 CL&P customers.

“These storms, as well as storms in June 2011 and September 2012, caused a variety of problems, including in some instances, flooding, a lack of water, interruptions in cellular phone, cable television and other communications services, downed trees and power outages impacting nearly every citizen and business in the state,” CL&P added.

The company said its design and construction standards, capital and O&M spending practices, pole maintenance and vegetation management practices before the storms were reasonable and did not cause increased restoration costs. Also, the company said it prepared for and responded to the storms in a manner that was consistent with its emergency plan and procedures.

Noting that in an August 2012 decision, PURA said CL&P’s performance in the 2011 storms was deficient in several areas, including training, the company said that even assuming the alleged deficiencies to be true, none of those factors had an impact on restoration costs or caused its overall storm costs to be higher than they would have been in the absence of the deficiencies.

Among other things, CL&P said it has implemented improvements, such as proactively reaching out to municipalities, increasing storm preparedness and response training and substantially increasing tree trimming in 2012.

CL&P is a subsidiary of Northeast Utilities (NYSE:NU).

About Corina Rivera-Linares 3152 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.