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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 30, 1996
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
(Exact name of registrant as specified in its charter)
Vermont 1-8222 03-0111290
(State of other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
77 Grove Street, Rutland, Vermont 05701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (802) 773-2711
N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events.
Retail Rate Order.
A Vermont Public Service Board (PSB) Order issued April 30,
1996 generally approves an agreement (Agreement) reached with the
Vermont Department of Public Service (DPS) regarding the
Company's 14.6% general rate increase request filed on October
17, 1995.
Under the terms of the Agreement approved by the PSB, the
Company will increase its Vermont retail rates 5.5% effective
June 1, 1996 and 2% effective January 1, 1997. In addition, the
Agreement caps the Company's allowed return on common equity in
its Vermont retail business for 1996 and 1997 at 11%, by
requiring the Company to reduce deferred Conservation and Load
Management costs to the extent its Vermont retail return on
common equity would otherwise exceed 11%, and prohibits the
Company from seeking any increase in Vermont retail rates which
would become effective before January 1, 1998, except for
extraordinary circumstances. The Agreement also requires the
Company to recognize in 1997, for accounting purposes,
approximately $5.8 million in power cost reductions associated
with a recently finalized agreement with Hydro-Quebec and to file
for a rate reduction if the Company is successful in negotiating
any further modifications to the Contract with Hydro-Quebec that
result in a reduction in the
cost of power from Hydro-Quebec between February 12, 1996 and
December 31, 1997.
In its April 30, 1996 Order, the PSB modified the
February 13, 1996 Agreement reached with the DPS by removing only
one of the two penalties imposed in the PSB's October 31, 1994
Order. Although the PSB's April 30, 1996 Order supports the
Agreement's removal of the penalty associated with the Company's
efforts to acquire cost-effective energy efficiency resources, it
only suspends the penalty for the alleged mismanagement of power
supply options through the later of January 1, 1998 or the next
investigation into the Company's rates. After this period, the
rate consequences of the penalty, a 0.75% reduction in the
Company's authorized Vermont retail return on common equity, will
be reimposed unless the Company demonstrates in future
proceedings that it has adequately met the standards for removal
as established by the PSB in its Orders issued October 31, 1994
and April 30, 1996.
During proceedings related to the April 30, 1996 Order,
certain intervening parties petitioned the PSB for a management
audit of the Company. In an Order dated April 10, 1996, the PSB
severed the management audit issue from the rate proceeding. The
PSB has scheduled a status conference on May 6, 1996 to address
whether there should be such an audit as well as other related
issues.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
BY JAMES M. PENNINGTON
James M. Pennington, Controller and
Principal Accounting Officer
May 2, 1996
