(Host) Vermont’s largest electric utility wants to raise rates by just over 6%.
Central Vermont Public Service Corporation says it needs the additional revenue to cover investments in its transmission and distribution system
Many utilities around the region have seen substantial rate increases because of higher power costs. CVPS President Bob Young says the company is protected against this kind of rate shock for now because of power contracts with Hydro Quebec and the Vermont Yankee nuclear plant.
(Young) “And we as a company are long on power until 2012 so we have relative stability for the next number of years around the power area. In fact in this rate case we show a reduction in our power costs.”
(Host) The last time CVPS raised its rates was in 2001. But last year, state utility regulators ordered the company to reduce its rates.
Financial rating companies then lowered the company’s debt to junk bond status. Young says it will take more than one rate hike to win back a favorable rating.
He says the rate increase is part of an overall plan to improve the firm’s finances.
(Young) “We accept the fact that we ultimately, the company, is responsible for our own financial salvation, if you will. We’ve taken a number of steps to work on that over the last 8 months or so. We secured a $25 million credit facility in October of last year. We cut our budgets in 06 to improve our cash situation. The officers and directors took decreases in their compensation.”
(Host) CVPS also sold off its Catamount energy subsidiary in order to focus on its core business of electricity sales.
The company serves about 151,000 customers.