NEW HAVEN, Conn., June 27, 2003 — At a public hearing recently, Connecticut’s Department of Public Utility Control (DPUC) denied The United Illuminating Co.’s (UI) request for recovery of $15.5 million in increased pension and post-retirement benefits expenses.
The company began recording these increased expenses in the first quarter of this year. The DPUC acknowledged that, “UI demonstrated increased expenses related to those items,” but stated that, “the company’s current earning at or near its allowed return on equity indicates that no ratemaking relief is necessary at present.” The DPUC noted, “that the company may request regulatory treatment for this specific expense in the future by filing a motion to reopen.”
“We are disappointed with the final outcome of this proceeding,” stated UI President Anthony Vallillo. “The Department, while recognizing these additional expenses, inappropriately inferred an annual return based on our first quarter results. The first quarter results were favorable due to the abnormally cold winter weather. The proposal we offered to the Department would have allowed the company to recover these costs, without increasing customer rates or exceeding our 2003 return on equity target.”
The company is presently reviewing the impact that this final decision will have on earnings for the balance of the year. “With this decision, we will need to make substantial cost reductions over the remaining six months in order to achieve our allowed return on equity of 10.45% in 2003,” reported Vallillo. “We are unable to conclude, without further review, what specific form these reductions might take.”
UIL Holdings Corporation is the holding company for The United Illuminating Company and United Resources, Inc. UI is a New Haven-based regional distribution utility that provides electricity and energy-related services to more than 320,000 customers in municipalities in the Greater New Haven and Greater Bridgeport areas.
URI is the umbrella for UIL Holdings’ non-utility business units, including Xcelecom, Inc., American Payment Systems, Inc., United Capital Investments, Inc. and United Bridgeport Energy, Inc. UIL Holdings World Wide Web address is http://www.uil.com/ and the company is traded on the New York Stock Exchange under the symbol UIL.