More than half of the increase is due to reliability investments in the New England and Vermont transmission systems, and the rest is due to increases in taxes, depreciation and infrastructure investments.
Green Mountain Power already operates very efficiently, with the most customers served per employee of any utility in the state, and meets or exceeds very high customer service standards, such as how quickly customers calls are answered and the reliability of the electric service.
To ensure system-wide reliability, every state pays a pro-rated share of all regional transmission reliability projects, based on its percentage of the total New England electric load. Vermonts four percent cost share requirement for the significant investments in the transmission infrastructure New England has made to meet reliability requirements contributes to this rate request. Other states, in turn, invest proportionately in Vermont transmission reliability upgrades.
Green Mountain Powers overall average rates are the lowest of the large utilities in New England and Vermonts five largest utilities, based on the most recent data available. The rate advantage is due in large part to long term contracts with Vermont Yankee and Hydro Quebec, which make up three-quarters of the Companys power supply, and to the rest of New Englands heavy use of fossil fuels, which are more volatile in cost.
We will continue to focus our efforts on delivering the most cost effective power to our customers, said Ms. Powell. And as we work to replace expiring electric energy contracts, we are seeking the most cost competitive and reliable sources that are also low in carbon emissions and other air pollutants. This includes our preliminary agreement with Hydro Quebec, as well as our plans to purchase wind power from New Hampshire, to build a wind farm in Lowell, our investments in solar generation and upgrades to our hydro electric facilities.
Green Mountain Power has operated under an alternative regulation plan since January 2007, which streamlines regulation while retaining appropriate regulatory review. It has been effective in significantly reducing regulatory costs while offering positive risk assurances to credit rating agencies. An updated alternative regulation plan has been approved by the Vermont Public Service Board and will be in effect until September 30, 2013.
If the full rate request is approved, the monthly bill for an average residential customer using 600 kilowatt-hours would increase by $2.91 from $93.62 to $96.53.