CV Requests 14.6% increase in Vermont retail rates; Company also proposes "Lifeline" program to help low-income customers pay their bills.

RUTLAND, Vt.--(BUSINESS WIRE)--Oct. 17, 1995--Central Vermont Public Service this week asked the Vermont Public Service Board to approve a general rate increase of 14.6 percent.

At the same time, CV proposed a special "Lifeline" program for low-income customers.

If the Public Service Board approves the Lifeline concept, the proposal would need ratifying by the Vermont Legislature.

How Proposed Lifeline Program Would Work

As proposed, the Lifeline program would serve an estimated 12,000 CV customers. They would be defined as low-income Vermonters by the state Department of Social Welfare using federal poverty guidelines. To support the program, the average CV residential customer would pay about 70 cents per month through the electric bill. The program would generate about $1 million yearly to help needy customers pay their bills.

Major Cost Increases for the Company

In its continuing cost-cutting efforts, CV has actually reduced its operational expenses by $5.2 million for 1996-97. The company seeks the rate increase, which would bring $31million in new revenues, to pay primarily for increased power supply and transmission costs along with conservation programs. The power-related costs account for about 94 percent of the proposed overall increase; of this, $17 million is for the continuing phase-in of power purchases from Hydro-Quebec. CV is working to renegotiate the contract, which the company signed with 14 other Vermont utilities, to reflect current market-price realities. If the renegotiations result in lower power costs, CV would ask the Public Service Board to reduce the size of the rate increase.

Consolidation of Districts Will Cut Costs for Rural Utility

CV remains one of the most rural utilities in the nation with an average of 18 customers per mile of line, compared to 28 per mile of line for Green Mountain Power and 124 for Burlington Electric Department. This extensive rural customer base historically has placed unit-cost pressures on the company. As part of the effort to cut the costs to serve customers, CV is consolidating six of its districts into three; the last consolidation -- merging the Woodstock and Randolph operations into a new service center in the South Royalton area -- is planned for mid-to-late 1996. Last year, the Bennington and Manchester operations were consolidated into a new Sunderland service center, and the Springfield and Ascutney districts were combined in CV's Springfield Industrial Park service center.

Impact on Bills

CV's average residential customer, receiving basic "Rate 1 service," uses a little over 500 kilowatt-hours of electricity per month. This customer would see a monthly bill increase of $7.40 for the eight summer months and $9.87 for the winter season.

The first 250 kilowatt-hours of electric use is served to CV customers at a consistent price year-round. This would increase proportionally to 10.6 cents per kilowatt-hour under the proposal.

Customers Advised on How To Control Electric Bills

The company is reminding customers of tools available to control electric bills. They are:

o Invest now in energy-efficiency measures offered by the company for long-term savings.

o Sign up for the monthly budget plan, which evens out bill payments for the entire year.

o Make a call to CV with questions about how to save energy and control the electric bill.

A portion of the proposed rate increase, representing about $2.5 million of the $31 million, would come from reinstatement of a rate of return for shareholders from 10 percent to 11 percent. The Public Service Board reduced CV's return as part of a penalty last year.

CONTACT: Bruce Simons, 802-747-5427

or 802/775-1593 at home