UI proposes rate freeze

Business Wire, March 28, 1996

NEW HAVEN, Conn.--(BUSINESS WIRE)--March 28, 1996--The United Illuminating Co. today proposed freezing base rates for the next five years, through Dec. 31, 2001.

The freeze is one element in UI's Connecticut Competitive Challenge, a comprehensive proposed framewok for the way the State Department of Public Utility Control might regulate the New Haven-based electric utility. UI submitted the plan to the DPUC this morning.

The incentive-based plan establishes performance goals that emphasize efficiency, innovation and service quality. Under the plan, UI's earnings will be affected by the achievement of specific performance goals. The plan is designed to benefit UI customers, the State of Connecticut and UI.

"This plan gives customers price stability and certainty through 2001," said UI President and Chief Financial Officer Robert L. Fiscus. "It also helps us continue efforts to improve our credit rating by paying down debt and by faster asset depreciation, putting us in a better position to pass along any benefits to our customers. And, because it is incentive-based, it assures that customers will continue to receive the excellent customer satisfaction and service reliability they expect from UI."

UI's reliability is consistently among the highest nationwide. A recent national comparison showed that a typical UI customer has electric service all but 66 minutes a year, compared to a national average of 202 minutes. UI's plan proposes that if service and reliability slip, the company will return money to customers.

While other utilities across the nation are also filing similar regulatory models, UI's plan differs in a significant manner: UI will not be allowed to increase prices even if the company achieves all of its performance goals.

"Customer demands for competitive electric prices, innovative products and better service are defining a new marketplace," UI chairman and CEO Richard J. Grossi said. "We believe this plan will enhance UI's economic position. A stronger, more competitive UI can better support Connecticut's economic development efforts and help the state attract and retain businesses and jobs. This makes good business sense for us and good economic sense for our customers and our state."

CONTACT: The United Illuminating Co., New Haven

Lucille Caliendo, 203/499-2666

Fran Mayko, 203/499-2817

After Hours, 203/499-2812