Norton Utilities Inc., the nation’s largest utility, said Wednesday that it is reducing rates for some customers as it works to reduce its long-term debt and its exposure to the financial fallout of Hurricane Irene.
In a statement, the utility said it will increase monthly rate increases by 10% for customers in the Norton, N.J., area, from $0 to $1.25.
The Northeast Utilities Co. also plans to raise rates in the New York-New Jersey area, where the utility had a base rate of $1,200 and a new $1-per-megawatt-hour rate is expected to be announced in the coming weeks.
It said it expects to raise rate increases for customers with an average monthly bill of $2,000 and higher in the Philadelphia area and New York City.
Norton said it would increase rates in Pennsylvania, New Jersey, New York and the Boston area.
As a result of the changes, Norton said in the statement that it expects that about 1,200 customers in its Northeast and New England areas will see an average increase in their bill from the previous year.
A spokesman for Norton’s parent company, Nortel Networks Inc., said the company is focused on increasing its resilience to the impacts of the storm.
“We know that with the continued resilience of our Northeast and Midwest region, we are able to make significant improvements to our services, and we look forward to working with our customers to implement these adjustments in the months ahead,” said Brian Stelzenberg, a spokesman for the company.
While the announcement did not provide a date for when rates would be increased, it is likely to come in the next few weeks, according to analysts.
Insurers are watching Norton closely as it tries to manage the fallout from Irene, which was the first major hurricane to hit the Northeast in more than a decade.
At the time of Irene’s landfall in September, Nortons rate-setting process was under pressure as it faced a $6 billion shortfall in rate payments from insurers for the first three months of the year.
As a result, Norten and other utilities were forced to reduce rates in a series of price hikes over the past two years.
With rates expected to increase, Nortont customers will be paying a higher price for power, and Nortont said it is considering increasing rates on some of its customers.
For customers who had previously paid their rates on a sliding scale, Nortonyx said it was considering reducing the number of rate changes it makes, as well as how often it makes those changes.
But it also said it plans to continue to provide rates that are more competitive with other utility customers.
The utility said the changes are expected to bring rates for Nortont’s base rate, which includes power and water, down by 5.5%.
Insurance companies are worried that rates could rise as much as 6% in the weeks ahead as the storm approaches.