Wednesday, November 29, 2006

Power Prices Going Up...Again!

According to the Connecticut Post (, November 16, 2006, Connecticut Light & Power has applied for another rate increase. This one will be 8.3% for residents and will amount to about $.015 more per kilowatt hour. According to the article, the request was made because the generation costs have increased. In CT, generation is just a pass-through charge, and CL&P enters into contracts annually to secure these costs. These are usually approved without much discussion.

Interestingly, the increase is actually lower than expected, because the federally mandated congestion charges will be going down, due I believe in part to a new underground power line in the area. However, according to the article, all of the 2007 power contracts are apparently not fixed as yet, and another proposal for an additional rate increase is to be expected for the 2nd half of 2007.

This 8.3% rate increase further improves the economics of the solar panels. Assuming no further increases come, the new rate cuts the payoff time by 4 years. Assuming 8.3% is the new inflation rate for power, and we get this rate increase every year, we can expect to get our money back by 10.5 years. Power then will be a whopping 41 cents/kwh. That power rate would be hard to believe, but given the corner we have painted ourselves into as a nation, that scenario cannot presently be ruled out.

A decision by the Dept. of Public Utility Control (DPUC) is expected by December 8, 2006. I'm not holding my breath.


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