RUTLAND - The Vermont Public Service Board has approved a Central Vermont Public Service alternative regulation plan designed to better link customer and investor interests, improve efficiency and help control costs.
"This construct will help CVPS better serve our customers, improve our credit worthiness, and encourage energy efficiency," CVPS President Bob Young said. "This is an important improvement in Vermont regulation."
The board order concludes nearly a year of review, and sets the stage for a new system of rate review starting in 2009. It provides for automatically adjusting rates on a quarterly basis to reflect fluctuating power purchase prices, and includes mechanisms to cap cost increases and to share earnings and losses between shareholders and customers.
Alternative regulation is intended to send customers more accurate and timely price signals, whether costs rise or fall, and create incentives for CVPS to operate efficiently. The PSB and DPS will maintain oversight over the company and its rates through annual reviews and regular quarterly updates of CVPS's costs and rates.
The plan will help CVPS as it begins to negotiate for resources to replace the two major long-term contracts for power from the Vermont Yankee Nuclear Power Station and Hydro-Quebec that expire in 2012 and 2015, respectively.