You asked a series of questions about federally-mandated transmission congestion costs (FMCCs), electric generation costs, and residential electricity consumption. We answer each question in turn. As noted below, in several cases data are not available to fully answer the question as posed. In addition, data are not available to answer your questions on generation costs.

FEDERALLY MANDATED CONGESTION COSTS

Which parties receive the revenues produced by the FMCC charges, and what proportion of these revenues does each party receive?

FMCCs are costs associated with congestion on the state's electric transmission system, including constraints on the ability to import power from other states. As a result of this congestion, several generating plants in the state need to operate, in order to maintain system reliability, even when their costs of production exceed the regional wholesale price of power. The generators that own these plants receive above market “reliability must run” (RMR) payments, which account for a substantial majority of the FMCCs. Since these payments are made to maintain the reliability of the state's electric system, they are non-bypassable. This means that they are paid by all electric customers in the state, regardless of whether they buy their power from the utilities or competitive suppliers. Other FMCCs are bypassable. This means that a customer could reduce this component of the charges by buying power from a supplier who gets a larger proportion of its power from more efficient generators.

The vast majority of revenues from both types of FMCCs ultimately go to the generators. The FMCCs are approved by the Federal Energy Regulatory Commission (FERC), which has jurisdiction over the wholesale power market. FERC has approved $ 78. 3 million in annual RMR payments to the generator NRG for its Middletown and Montville plants. These payments will be made until June 1, 2010. Starting on that date, a new mechanism called the Forward Capacity Market is scheduled to take effect. This market is intended to provide generators with payments that are sufficient to ensure that there is enough generating capacity available to ensure system reliability.

PPL, which owns Wallingford units 2 to 5, currently receives $ 30. 7 million in RMR payments on an annual basis, so long as the plant is needed for reliability. The owners and other market participants have submitted a settlement agreement to FERC, in which the owners would receive the annual equivalent of $ 22 million, plus $ 1. 8 million per month to amortize the accrued RMR payments. Under the settlement, the payments would end on June 1, 2007.

The owners of three other plants have submitted settlement agreements to FERC, which are described in Table 1.

Table 1: Proposed RMR Settlements

Assuming FERC approves all of the settlements, NRG would receive approximately 29% of RMR payments in 2007, PPL 7%, Milford Power 27%, PSEG 20%, and Bridgeport Energy 18%. The proportions would change in subsequent years.

The one significant cost recovered in the FMCC that does not go to generators pays for the administrative services provided by the Independent System Operator-New England, which administers the regional power market. This charge is approximately 0. 5 cents per kilowatt-hour, i. e. , less than 3% of an average bill.

GENERATION COSTS

What is the average generation cost during peak and off-peak periods, during August, summer as a whole, and winter?

The wholesale electric market does not operate on a cost basis, and these data are not available because generators view cost data as proprietary. The vast majority of the power sold on the wholesale market is sold under bilateral contracts between utilities and either generators or power marketers. (Some marketers, such Goldman Sachs, buy and sell power as a commodity. Others, such as Constellation Energy, also have generation affiliates). Some generators report price data to the Independent System Operator (ISO)-New England, which administers the regional power market. However, (1) price differs from costs and (2) the data are only reported by some generators, and on a voluntary basis, and these price data are not necessarily representative of the entire market.

A smaller share (perhaps 15%) of power is sold on the spot market under a bid system. ISO-New England has extensive data on prices on this market, which can be found at http: //www. iso-ne. com/markets/hstdata/index. html. Again, these are price rather than cost data.

RESIDENTIAL ELECTRIC CONSUMPTION

What was the average electricity consumption in single family homes during the past three years?

The utilities have consumption data for the residential class, including people living in small multifamily buildings, rather than just for single family homes. In 2005 (latest statewide data available), Connecticut's average consumption per residential customer was 804 kilowatt-hours (kwh) per month. In 2004, the average was 775 kwh, and in 2003 it was 764 kwh.

Historically, average residential consumption for United Illuminating (UI) customers has been less than Connecticut Light and Power (CL&P). (In 2006, UI's average consumption per residential customer was approximately 680 khw per month. ) It is likely that this difference is due to:

1. UI's service territory location being along Long Island Sound, while most of CL&P's territory is inland, where summers are somewhat warmer and winters are somewhat colder than on the shore;

2. a larger proportion of UI's customers living in multi-family housing, which is less energy-intensive than single family housing; and

3. UI having historically somewhat higher rates than CL&P.

What proportion of residential consumption occurs in August, the months of June through September, and the months of October through May?

For CL&P, which serves about 75% of the residential customers in the state. Approximately 12% of annual residential consumption occurs in August, 39% in June through September, and 61% from October through May. For UI, which serves about 20% of residential customers, approximately 10% of consumption occurs in August, 38% in June through September, and 62% in October through May.

What is the average peak and off-peak residential consumption during these periods?

These data are not currently available. However, on annual basis for CL&P, 42% of residential consumption occurs from noon to 8 p. m. on weekdays (the Department of Public Utility Control defines this as the peak period for purposes of setting time of use rates). It is likely that UI and the municipal electric utilities have similar patterns.

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