CVPS, DPS Reach Rate Agreement
September 11 2006 - 12:03PM
Business Wire
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.
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