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Proposed new Connecticut utility rate draws fight

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HARTFORD, Conn. (AP) — Consumer advocates and state officials are lining up against a request by Connecticut's largest utility to raise $232 million from a rate increase that would be used to upgrade equipment following destructive storms and toughen systems to prevent outages in the future.

Customers would pay an average $150 more a year, up about 6 percent, if regulators side with Connecticut Light & Power. The bulk of the increase would be higher monthly charges totaling $114 a year regardless of how much electricity is used, which critics say would undermine energy conservation.

William Dornbos, senior attorney at Environment Northeast, an advocacy group, called the rate request a "flawed proposal" that would make it harder for consumers to save electricity and money with energy-efficient appliances, rooftop solar panels and other flexible was to buy cheaper electricity.

"It conflicts with the many good things we're trying to do here in Connecticut to help electricity customers get control over their bills," he said.

CL&P, a subsidiary of Northeast Utilities, said about $117 million would pay for new and stronger poles, wires, transformers and substation upgrades. It already has permission from the state to recover $89.5 million for costs related to damage from storms in 2011 and 2012, and $25.3 million to protect equipment from storms in the future.

Mitch Gross, a spokesman for the utility, said the rate request is needed for capital improvements in equipment and systems. Electric reliability was better last year than in more than 10 years due to "targeted system improvements and replacements," he said.

The utility, which serves 1.2 million customers, also has worked to control operating costs that have resulted in consumer savings, Gross said.

Elin Swanson Katz, the state's consumer counsel, is asking regulators to cut CL&P's request by $109.2 million. Reducing the increase in the monthly charge would be more in line with what utility customers pay in neighboring states "and what seems merited by the facts," she said.

Gov. Dannel P. Malloy said raising the fixed monthly service fee on electric bills "is at odds" with Connecticut's strategy of encouraging energy efficiency and the use of renewable energy sources.

Sen. Richard Blumenthal, D-Conn., said CL&P is seeking to raise rates charged to customers to boost profit with a rate of return that would increase to 10.2 percent from 9.4 percent.

"Its only purpose is to increase CL&P's rate of return to make it one of the highest in the whole country," he said.

Robert B. Hevert, a consultant for CL&P who testified before the Public Utilities Regulatory Authority in June, said a 10.2 percent return on equity for electric utilities "is a reasonable, if not conservative estimate."

The first of three hearings is set for Wednesday at the Public Utilities Regulatory Authority in New Britain.

A draft decision by the state is expected Dec. 1.

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Follow Stephen Singer on Twitter at https://twitter.com/SteveSinger10

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