Bills would make utilities, execs more accountable
Published 7:16 pm, Tuesday, March 27, 2012
HARTFORD -- Two bills making utilities and their executives more accountable to customers were passed out of the Legislature's Energy and Technology Committee Tuesday afternoon.
One proposal instructing the state's Public Utilities Regulatory Authority to establish performance standards that could result in maximum fines of $25 million sailed through the committee with no debate.
Lawmakers pledged to pursue the standards -- modeled on a Massachusetts' regulation and backed by Gov. Dannel P. Malloy -- after residents were left in the dark for days following August's Tropical Storm Irene and late October's nor'easter.
But a second piece of legislation -- An Act Concerning Consumer Protection for Utility Customers -- caused some division and made it out of the committee in a 14-7 vote.
Members differed over limits imposed on utility executives' pay and on legislating the reimbursement of customers for spoiled food and medications following an outage.
In the case of executives' salaries, the bill would limit the amount of compensation borne by ratepayers to $350,000. The balance would have to come from shareholders.
"We've looked at this issue before. I think it takes on a new light this year in light of the storms," Rep. Vickie Nardello, D-Prospect, a committee co-chairwoman, told her colleagues. "If we limit the ratepayer amount of executive compensation (we) would be freeing up dollars we could use to hire linemen, use for tree trimming, whatever it is."
But her co-chairman, Sen. John Fonfara, D-Hartford, who is considered more industry-friendly, said he has reservations.
"We are a state that is supposed to be open for business, and we put into statute what ratepayers should be willing to contribute and regulators should authorize as their share of an executive's salary," he said. "We learned some months ago how important electricity is in all of our lives ... To indicate in statute a hard and fast figure as to what would attract the best and brightest people to run our utilities I think is a big mistake."
Fonfara and some Republicans also took issue with the concept of reimbursing customers for spoiled food and medicines.
In the face of intense public pressure over its response to the October snowstorm, Connecticut Light & Power parent Northeast Utilities set aside $10 million to help cover damages for customers whose electricity had not been restored as of noon Nov. 5. The company then boosted that to $30 million.
In February the utility announced approximately 192,000 CL&P customers qualified for a $140.22 credit in that month's bills.
The energy committee's proposal would require individuals who lacked refrigeration beyond 48 hours to receive $150 toward spoiled food and $200 for medications depending on their household income. They would also have to display an itemized list of losses and photographic proof.
"I believe the way the bill is written the window of opportunity for fraud is immense," Rep. Penny Bacchiochi, R-Somers said.
The Malloy administration has been investigating fraud perpetrated by state employees who after last year's storms sought federal disaster assistance intended for low-income residents.
Fonfara also expressed doubts.
"While we all are sympathetic of people who have lost food in storms, there are realities to life in terms of what happens," he said. "It's easy to say we're going to pay you back that your milk became sour. We have to balance those interests (with) our ability to manage rates and make rates affordable."