Utility executives and officials have been warning for years that the lack of natural gas pipelines in New England threatens to drive up power prices, and now Connecticut's largest utility is asking state regulators to approve a rate increase.
"Though natural gas remains an abundant and inexpensive fuel, regional pipeline limitations and the growing dependency on gas to produce electricity are pushing prices higher," Connecticut Light & Power said in a statement when it made the request on Friday.
Continue Reading Below
CL&P asked the state Public Utilities Regulatory Authority to allow it to raise its standard service rate, which is the power generation option available to residential and business customers, to about 12.5 cents per kilowatt-hour from about 10 cents. An average monthly residential bill would rise to about $87 from $70.
If approved the six-month rate increase would start Jan. 1.
ISO-New England, the Holyoke, Massachusetts-based grid operator for the region, said last week as it released its regional plan that the power system is going through a rapid transformation driven by the retirement of power plants and a "lack of fuel adequacy," primarily due to a bottleneck in natural gas pipelines.
At the same time Connecticut is pursuing an ambitious natural gas expansion plan by connecting about 280,000 customers over 10 years.
Regulators could act on CL&P's request as early as Nov. 17, said a spokesman for state utility authority. Regulators need to review less information than in other rate requests because the natural gas price increases underlying this request already have been posted in contracts purchased under state oversight.
In contrast, the utility agency has been reviewing for several months a separate CL&P request to raise $232 million to upgrade equipment following destructive storms. That proposal has drawn opposition from consumer advocates.
CL&P's parent company, Northeast Utilities, and Spectra Energy announced plans in September to expand natural gas access to New England. The companies said the $3 billion project expanding a network of pipelines is expected to begin operating in November 2018.
Northeast Utilities also has proposed its Northern Pass project, a 187-mile electrical transmission project in northern New England, to bring energy from Hydro-Quebec's hydroelectric plants to New Hampshire and elsewhere in New England.