Settlement With Power Generator Benefits 33,000 CT Residents

HARTFORD — Attorney General Richard Blumenthal and Department of Consumer Protection (DCP) Commissioner Edwin R. Rodriguez announced this week that Dominion Retail, Inc, whose parent company owns the Millstone power plants, will pay $707,182 for allegedly overcharging consumers on their January 2006 electricity bills. The settlement calls for Dominion to credit $507,182 to its 33,000 Connecticut retail customers and forfeit $200,000 to the state.

Customers who signed up with Dominion were promised cheaper electricity than offered by Connecticut Light & Power (CL&P). Mr Blumenthal contends that Dominion broke that promise and violated the law when it illegally imposed a January 1, 2006, rate increase on the December 2005 portion of consumer bills.

“Dominion squeezed strapped consumers with illegal overcharges, which it agreed to repay only after being caught,” Mr Blumenthal said. “Despite already huge windfall profits from its affiliate’s operation of Millstone, Dominion imposed a rate increase prematurely and illegally, hoping no one would notice. This settlement sends a strong message: We will [scrutinize] utility bills to stop illegal overcharges. Dominion broke its promise to charge cheaper rates than CL&P and raised rates without required notice.”

“There was absolutely no reason why these consumers had to pay a higher cost for electricity usage,” Commissioner Rodriguez said. “The DPUC-approved higher rates for CL&P were not yet in effect. Under the circumstances, Dominion should have given consumers advance notice of the higher rates or the option to switch to other suppliers. I am pleased that these consumers will be getting back their money.”

Under electricity deregulation, CL&P no longer owns power plants. The company buys power from independent generators, producing a “standard offer” or price. Consumers can buy power from CL&P at the “standard offer” or from other sources.

Dominion, through an independent company called Levco, offers power to CL&P residential consumers who do not want to pay the “standard offer.” The company promised its 33,000 Connecticut customers that its rates would always be below the “standard offer.”

In recent years, increases in the “standard offer” have kicked in on January 1. CL&P computers have the ability to prorate the standard offer portion of January bills that included December days charged at the lower rate. CL&P, however, lacks the ability to prorate Dominion’s supplier charges.

In prior years, Dominion waited until the February bill to impose a January 1 rate increase to avoid overcharging customers for their December usage. The company, however, last year included the increase in its January bills without prorating their December portions.

As a result, Dominion overcharged its customers $507,182.

Dominion will return the $507,182 overcharge to consumers through a credit on their November or December bills. The size of each consumer’s credit will depend on their power usage and how many December 2005 days were included in their January 2006 bill. Refunds are expected to average about a $15 a customer.

Of the $200,000 forfeiture to the state, $190,000 will be deposited into the General Fund and the remaining $10,000 will go into a low income energy assistance fund to be designated by Mr Rodriguez.