UI to Invest in CL&P Transmission Projects
July 15 2010 - 9:18AM
Business Wire
Today The United Illuminating Company (UI) (NYSE: UIL) and The
Connecticut Light & Power Company (CL&P) (NYSE: NU) filed a
joint application with the Connecticut Department of Public Utility
Control seeking approval for UI’s investment in and ownership of
transmission assets associated with the Connecticut portion of
CL&P’s New England East West Solution (NEEWS) projects to
improve regional energy reliability.
NEEWS consists of four inter-related transmission projects being
developed by subsidiaries of Northeast Utilities (NU), the parent
company of CL&P, in collaboration with National Grid USA. Three
of the projects have portions sited in Connecticut: (1) the Greater
Springfield Reliability Project, (2) the Interstate Reliability
Project and (3) the Central Connecticut Reliability Project. Based
on data prepared by CL&P, UI expects the cost of building the
Connecticut portion of these projects will be approximately $711
million.
Under the terms of an agreement between UI and CL&P, which
will be subject to state and federal regulatory approval, UI has
the option to make quarterly payments to CL&P in exchange for
ownership of specific transmission assets as they come into
commercial operation. Following regulatory approval, UI will have
the right to invest up to the greater of $60 million or an amount
equal to 8.4 percent of CL&P’s costs for the Connecticut
portions of these projects. As assets come into commercial
operation, CL&P will transfer title to transmission assets such
as poles and wires to UI in proportion to its investments, but
CL&P will continue to maintain these portions of the
transmission system once they are in operation pursuant to an
operating and maintenance agreement with UI.
UI's investments are expected to be made over a period of three
years based on current project completion projections.
This proposed transaction follows the successful collaboration
of CL&P and UI on the 345-kV Middletown-to-Norwalk Transmission
Project, where each party owns portions of the line. The
Middletown-to-Norwalk Transmission Project went into commercial
operation at the end of 2008.
“CL&P and UI have long worked together to advance needed
transmission infrastructure for efficient and reliable energy for
Connecticut,” said James A. Muntz, senior vice president-
Transmission for CL&P.
“This transaction continues to promote a cooperative spirit of
addressing transmission needs in Connecticut,” said John J. Prete,
UI’s vice president of Transmission. “While UI will not physically
construct any portion of NEEWS, its participation will provide
benefits similar to those provided in the Middletown-to-Norwalk
Transmission Project.”
In addition to today’s DPUC filing, CL&P and UI will seek
required approvals from the Federal Energy Regulatory Commission.
The transaction is conditional on the receipt of state and federal
regulatory approvals, among other things, and is subject to
termination and other rights as more fully described in the
agreement. This transaction is already reflected in the
transmission capital expenditure and rate base forecasts published
in NU’s annual report.
The United Illuminating Company (UI) is a New Haven-based
regional distribution utility established in 1899. UI is engaged in
the purchase, transmission, distribution and sale of electricity
and related services to more than 325,000 residential, commercial
and industrial customers across 17 cities and towns including the
Greater New Haven and Bridgeport areas. UI is a wholly owned
subsidiary of UIL Holdings Corporation (NYSE: UIL). For more
information please visit www.uinet.com.
The Connecticut Light and Power Company (CL&P) has been part
of everyday life in Connecticut for more than 100 years, providing
safe and reliable electric service to homes, neighborhoods and
businesses. With 1.2 million customers in 149 cities and towns,
CL&P is improving the environments you live in, by offering
programs in energy conservation, economic development and
environmental stewardship. CL&P is a Northeast Utilities
company (NYSE: NU). For more information, please visit
www.cl-p.com.
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