The Cooperative’s six member utilities including Groton Utilities, Norwich Public Utilities, Jewett City Public Utilities and Bozrah Light and Power, owned by Groton Utilities, intends to create a new entity called the Connecticut Transmission Municipal Electric Energy Cooperative.
Till now, the plan to incorporate a new entity was approved by five companies, dubbed CT Transco, and the Norwich City Council is due to consider a resolution on September 7, 2009, to approve the measure.
In expectation of the approval, CMEEC officials are in negotiations with Northeast Utilities on a deal that would have CT Transco purchase a share of the electricity transmission lines in Connecticut. This would provide CT Transco partially with the transmission fees, that, under the federal regulations, the owners of the lines are entitled to receive.
According to John Bilda, general manager of Norwich Public Utilities, this would result in reducing the rates for municipal utility customers. The owners of those lines are allowed by the Federal Energy Regulatory Commission (FERC) to receive 13% return on investment in the rates charged from the customers, who receive power through the transmission lines.
CT Transco, the proposed new company, would receive 13% in revenue if it acquires a portion of the lines. CT Transco plans to borrow the required funds to purchase its share of transmission lines.
Mr Bilda continued that if the company borrows funds at 5-6% interest to purchase the transmission lines, it would in-turn receive 13% revenue, where the difference would be poured back into the CMEEC member utilities as direct rate savings. Even though the transmission fees have to be paid by the municipal utility customers, they would receive a part of it through lower utility rates. The negotiations with NU are expected to be completed by the end of 2009.
The NPU Board of Public Utilities Commissioners has approved participation in CT Transco. The resolution to form and join CT Transco was approved by the Groton Public Utilities Commission. Any future agreement with NU would have to get approval from FERC and the state Department of Public Utility Control.
