Irene, lower power costs affect rates in opposite ways

For Immediate Release:
May 15, 2012

Steve Costello
Director of Public Affairs, CVPS
(802) 747-5427 (work)
(802) 742-3062 (pager)

Lower-than-expected power costs and Tropical Storm Irene will prompt a bill credit and small temporary rate increase respectively for Central Vermont Public Service customers July 1.

For a typical residential customer using 500 kilowatt-hours of electricity per month, bills will increase by $1.20, or 1.4 percent, on July 1. This increase is the net effect of a 2.2 percent surcharge to recover about $7.5 million of extraordinary costs of repairing and rebuilding CVPS’s facilities in the wake of Tropical Storm Irene last year and a three-month bill credit that will be in effect starting in July to reflect the fact that power supply costs were slightly lower than expected in the first quarter of 2012.

Under the company’s alternative regulation program, power supply savings are returned to customers while extraordinary costs, such as those related to Irene, are recoverable in rates. The Public Service Board must approve the changes. If approved, the 2.2 percent surcharge will go into effect starting July 1, 2012 and will last for one year. At the same time, the savings that will be credited to customer will also show up on the electric bill.

Even with the temporary increase, the company’s rates will remain competitive with the major utilities in New England. For example, in July, the typical bill for a CV residential customer will be $87.43; by comparison, the same customer could pay as much as $107.41 elsewhere in New England, according to the Edison Electric Institute.

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