Important Information on NPU Rates
NORWICH – Over the past ten months, our team has been working with consultants to develop a ‘Cost of Service Study’ that helps us determine what rates are necessary across all four of our utilities to meet our expenses to provide them safely and reliably.
Taking a number of factors into consideration, such as inflation, supply chain issues, staffing concerns, etc., our calculations and analysis resulted in the following recommendations:
- Natural gas 4.5% increase – in line with inflation
- Electric 4.75% increase – in line with inflation
- Water 8.32% increase – our first rate increase since 2018
- Sewer 12.1% increase – to support major upgrade
During its meeting in September, the NPU Board reviewed, discussed, and unanimously approved these rates, which will go into effect on November 1, 2023.
Additional Perspective on NPU Rates:
When combined with the significantly reduced cost of natural gas and electricity, the overall impact on customers will result in lower bills for nearly every NPU customer.
- We are proposing increases to our natural gas and electric rates that are in line with inflation – but given the significant reduction in the cost of both commodities, we will be able to reduce our Purchased Power Adjustment (PPA) and Purchased Gas Adjustment (PGA) for all customers.
- Our rates for water have not increased since 2018, and during this time, we have completed nearly $20 million in facility modernizations and improvements.
- We are potentially only weeks away from breaking ground on a new wastewater treatment plant, a facility that was built in the 1950s with a 50-year lifespan. This project will receive very significant federal and state support to minimize the impact on our customers – and we will continue to advocate for additional resources to reduce our rates in the future.
Now approved, NPU rates will be well below those of investor-owned utilities in Connecticut:
- Natural gas Approximately 10-15% lower
- Electric Approximately 30% lower
- Water Approximately 20-25% lower
- Sewer 11th highest of 17 recent projects completed in the region
As approved by the Board, NPU residential customers would see significant reductions in their bills:
- 4-service residential Savings of $51/month, reduction of 12:7%
- 3-service residential (no sewer) Savings of $60/month, reduction of 17.91%
- 2-service residential (no water / sewer) Savings of $63/month, reduction of 22.14%
- 2-service residential (no gas/sewer) Savings of $11/month, reduction of 5.7%
As part of the three-year rate track that was approved by the NPU Board of Commissioners in September, we have developed NPU’s Community Assistance Rate (CAR) that will provide a discounted electric rate for eligible customers in Norwich beginning on November 1, 2023.
Norwich households with incomes below 60% of the State of Connecticut’s Median Household Income by family size would be eligible for this new electric rate. We believe that approximately 20% of the households in Norwich would be eligible, based on participation in various heating assistance programs.
As an example, below are the 60% State of CT Median Household Income qualifications as of September 2022 published by State Department of Social Services:
Family Size 60% State Median
NPU will work with the Thames Valley Council for Community Action (TVCCA) to confirm income information for applicants; this process will take place as part of the annual application process for energy assistance each year.
Effective November 1, 2023, qualified customers would be given a 10% discount on the electric portion of their bill each month. For a low-income customer with a monthly electric bill of $200, this would represent a savings of $20 per month and $240 per year.
NPU would also extend an additional 10% discounts to customers who are enrolled in AutoPay each month, which could result in an additional savings of $240 per year.
This discount would be capped at 1,000 kWh per month, which we hope will encourage a more efficient use of electricity. Customers who do not remain current on their bills would not be eligible for the additional 10% discount rate.
We estimate that this program would result in approximately $1 million in forgone revenue for NPU; however, this is an attempt to provide a measure of relief for individuals and families who are experiencing financial difficulties. We also believe that the program will help NPU reduce the number of past-due accounts.