Regulator Directs Utilities To Notify Large Customers In Advance Of Default Service Rate Increases

October 1, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA has directed Connecticut Light & Power and United Illuminating to, in the future, proactively contact each of their Last Resort Service (LRS) customers to communicate proposed Generation Service Charge (GSC) rate changes in advance of future potential LRS rate increases.

LRS is default service for large commercial and industrial customers with a demand of more than 500 kW

PURA recently approved new LRS rates at both utilities effective October 1, 2020.

PURA noted that, at CL&P, the average LRS generation rate for the fourth quarter of 2020 (Q4 2020) reflects an increase in power supply costs from the current average rate of 6.263 cents/kWh to 7.685 cents/kWh (note that this is an average rate, and actual billed LRS rates vary by month; this also does not include the Bypassable Federally Mandated Congestion Charge, or BMFCC). PURA noted that the overall generation service for CL&P LRS customers -- the combined GSC and BMFCC costs -- is to increase by 23% on average during Q4 2020

At UI, PURA said that the average LRS generation rate for the fourth quarter 2020 (Q4 2020) reflects an increase in power supply costs from the current third quarter 2020 average of 8.8007 cents/kWh to 10.3159 cents/kWh, an increase of 17.2% (note that this is an average rate, and actual billed LRS rates vary by month).

PURA noted that CL&P already proactively contacted all of the currently enrolled LRS customers to communicate the proposed GSC rate increase to be effective October 1, 2020. Specifically, CL&P said that it had, "proactively communicated and contacted all of the currently enrolled LRS customer accounts, to inform them of this October 1st change, and also provided those customers with historic LRS pricing so they have context for this rate change." CL&P further said, "These very large commercial and industrial customers have the opportunity to compare these proposed rates with other energy supply offerings from competitive retail suppliers."

PURA directed CL&P to continue to conduct these proactive communications in advance of future potential LRS rate increases.

PURA also directed UI to, "proactively contact each of its LRS customers to communicate the proposed GSC rate change in advance of future potential LRS rate increases."

At CL&P, there are currently less than 100 customers taking service under LRS. At UI, there are approximately 20 customers currently taking service under LRS. The majority of customers eligible for LRS elect generation service from an electric supplier through the retail market

UI's fourth quarter LRS rates resulted in off-peak rates that are higher than peak rates. In future LRS filings, the Authority directed UI to include a discussion of historical trends in LRS bids submitted, and selected, that included higher off-peak pricing than on-peak pricing.

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