Wallingford utilities commission uses reserve to offset increase

Wallingford utilities commission uses reserve to offset increase

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WALLINGFORD — The Public Utilities Commission voted recently to spend an estimated $2.2 million in cash reserves to eliminate a potential increase in residential electric bills. 

The use of reserves will prevent a $6 increase, or 5.7 percent, to the average residential customer’s monthly bill from January to June, according to Tom Sullivan, the Electric Division’s business office manager.   

The hike would have been caused by an increase in the cost of wholesale power, which is captured using a variable called the “power cost adjustment,” or PCA, which reflects fluctuations in the cost of wholesale power.

The PCA is measured in a positive or negative fraction of a cent paid per kilowatt hour of energy used. It is multiplied by the number of kilowatt hours of energy a customer used to determine the additional charge. The charge is included on each monthly electric bill and is the same for all residential, commercial, and industrial customers in town. 

Every six months, the PCA is recalculated and the PUC decides whether to pass those costs off on customers or use reserves to absorb the additional expense.  In June, the utilities commission voted to use cash to offset the PCA from $0.001563 to zero, eliminating an additional monthly charge to customers. 

For the upcoming six-month period, the commission voted late last month to decrease the PCA from  $0.007953 to zero. The average resident customer, which uses 750 kilowatt of hours of electricity, would have paid an additional $6 monthly had the commission used no cash reserves. 

The Wallingford Electric Division held $28.6 million in cash reserves as of December 19, according to meeting minutes. That amount is $9.5 million over the $19.1 million minimum that consultants recommend the Electric Division retains based on its operations and capital expenses. 

The PUC voted 3-0 on Dec. 19 to utilize an estimated $2,194,899 to offset the PCA from January to June of this year, a move that was recommended by Public Utilities Director Richard Hendershot and Sullivan at the meeting, according to meeting minutes. The commission will decide again in June whether to use cash to offset the PCA from July to December of this year. 



Twitter: @MatthewZabierek

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