Utility, Energy Co. Propose Deal To Generate Power In Conn.

By Stephen Singer

Associated Press

HARTFORD — United Illuminating Co. and NRG Energy Inc have proposed investing as much as $700 million in a partnership to build power plants in Connecticut to supply electricity during peak periods of demand.

The proposal will be submitted to state regulators early next year and plants could operate in 2009. It would bring a utility back into the generation business for the first time since the General Assembly deregulated utilities in 1999. Utilities have since focused only on distributing electricity.

“We’ve been out of the generating business since 1999,” James P. Torgerson, chief executive of United Illuminating, said at a news conference. “We don’t have the resources to build peaking plants. NRG is a great fit.”

UI and Princeton, N.J.-based NRG say the plan is in response to Connecticut’s need for power during periods of extreme heat and cold. Enormous demand taxes not only the state’s power supply, but also adds to peak loads on the New England power grid.

The plants, which could be built on NRG sites in Middletown, Milford, South Norwalk, or Uncasville, would supply between 400 and 700 megawatts of power.

United Illuminating, which serves 320,000 customers in southern Connecticut, and Connecticut Light & Power, with 1.2 million customers, are required by state law to come up with a plan to generate power at peak times. Mitch Gross, a spokesman for CL&P, said the utility will propose a plan to state regulators in which it would generate power on its own.

The legislation enacted this year was an attempt to rework Connecticut’s energy policy. Lawmakers say the state’s deregulation of the electric industry has fallen short because prices have risen rapidly in the last several years.

Representative Steve Fontana, co-chairman of the General Assembly’s Energy and Technology Committee, said the legislation was a compromise. He said he would have preferred returning utilities to the generation business, but he could not persuade fellow lawmakers to agree.

Instead, a compromise was struck with legislation requiring utilities to generate power at peak times, Fontana said.