Tuesday, October 28, 2008

Text of my testimony submitted to the DPUC hearing on 10/27/08

October 27, 2008

Connecticut Department of Public Utility Control
Ten Franklin Square
New Britain, CT 06051

Re: 08-07-04 (BDP) UI Rate Increase-Public Comment Hearing

Dear Honorable Board of Commissioners:

I come before you this morning to express my strongly protest any increase in rates. I represent a number of interests. I am a homeowner in New Haven that heats our home with natural gas. I am representing my family business of which I am part of the 3rd generation. Lastly I come before you as a member of the New Haven Board of Aldermen where I represent the 28th Ward – Beaver Hills.

As a homeowner I know how my utility bill more then doubled in the past two years. In an effort to be more energy efficient a few years ago I had installed new windows in my home – with argon and low e, we upgraded all of our lights to CFLs and installed more energy efficient appliances when replacing them. All of this hard work has paid off, our monthly usage is less then it was in 2006. I also signed up to purchase my electricity from an alternate suppler – LEVCO. Levco and all of the other resellers raised electricity rates last year but their sales pitch was that we are still cheaper then UI. In researching the matter I found that UI can only purchase electricity a few months out at a time. Everyone else can purchase years at a time (as the City of New Haven just did to stabilize our costs). All the resellers are basing their charges on UI – if UI gets a increase you can be sure that all of the others will follow – but stay just enough under UI to stay in the game.

UI claims that they have not been able to sell as much electricity as they projected. This fact accounts for 40% of the shortfall projected by UI and is a prime driving force for the increase. If, I, as a customer and other like me are conserving electricity as promoted by DPUC and UI, they should not be penalized for doing the “right” thing. Also, future increases will result in future drops in demand, creating a feedback mechanism that ensures high prices.

As a manufacturer still based wholly in West Haven we are a substantial user of electricity. We have consultants that track the energy markets and advises us when it is advantageous lock in a contract for electricity usage. We are competing in an international business climate and on top of the fuel increases and on top of raw material increase we have to contend with some of the highest utility rates in the nation. This makes us less competitive going up against companies in other states never mind compared to overseas. One of our Stratford Connecticut bases suppliers closed their doors this past January – one of the primary reasons was the high utility rates cut their margins and they were unable to raise prices enough to survive. The company I work for is not guaranteed a profit but UI is. UI claims that it will not meet its projected profit as stipulated by the DPUC. In a time of financial hardship and economic turmoil, the DPUC should balance the need for a guaranteed profit with the decreased means of ratepayers

As an Alderman in New Haven I meet people of all walks of life – rich, poor, middle class; black, white, Hispanic. Across the city folks from all walks of life - regardless of race or economic class – people are worried about paying their utility bills.

To address another point that UI bring up. While overall demand is going down, peak demand has been going up steadily in CT. UI states that the capital costs related to upgrading its distribution network are above the DPUC projections. Urban residents such as New Haven’s residents are bearing the burden of extending and upgrading distribution networks in less dense suburbs. These urban customers are often less able to afford the rate increases that make this subsidy possible.

I understand the need to maintain a strong public utility – but the utility should not be allowed to take advantage of the market. I urge you not to approve this increase but to give UI the ability to purchase more then a few months of energy at a time so that they can really compete in the overall market and with that the DPUC will really help the ratepayer.

Respectfully yours,

Mordechai “Moti” Sandman
Alderman Ward 28
City of New Haven
165 Church Street
2nd Floor
New Haven, CT 06510

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