Jepsen Calls On Regulators To Impose Penalties On Utility
Attorney General George Jepsen is hoping the state’s utility regulatory authority imposes penalties on Connecticut Light & Power Company for its inability to respond or assess power outages in a timely manner following last year’s two storms.
“CL&P failed to prepare for major weather events, failed in its assessments and failed to adequately communicate with the public and public officials,” Jepsen said Monday. “The company’s ‘worst-case scenario’ emergency response plan only prepared for 100,000 power outages; they had no plan whatsoever for outages on the scale that we saw not once in 2011, but twice.”
During Tropical Storm Irene CL&P reported having 700,000 customers without power and more than 800,000 customers, some for as many as 11 days, were without power during the Nor’easter in October.
Earlier this year state was already able to get 1.2 million CL&P ratepayers an estimated $16 credit in a $25 million it struck with CL&P’s parent company, Northeast Utilities, regarding that company’s merger with Massachusetts -based NSTAR. In that deal the state was also able freeze electric distribution rates for Connecticut customers until Dec. 2014 and forego $40 million in recoverable storm costs.
But the company incurred $263 million in restoration costs following the two storms, and most, aside from the $40 million, could still be recoverable through rates. However, the utility has not filed documents with regulators seeking a rate increase to help them cover the costs. As its penalty, Jepsen said he doesn’t want the utility to recover 30 to 50 percent of the costs through ratepayers.
Earlier this year, NU shareholders used $30 million of their own money to rebate customers without power for more than seven days following the October storm.
Al Lara, spokesman for Northeast Utilities, said since Jepsen’s brief is being filed as part of an ongoing review by state regulators it “wouldn’t be appropriate for us to respond.”
“As you are aware, these were major storms,” Lara added. “However, a number of independent consultants who have reviewed our preparation and response have concluded that CL&P accomplished these restorations safely and in line with industry norms. “
Regulators are also expected to look at United Illuminating’s response to the two storms, but UI which serves 17 towns does not play a prominent role in Jepsen’s brief and had few complaints regarding its response to the outages. A review of the performance of both utilities is expected to be completed by Aug. 1.
In Monday’s brief Jepsen said the CL& P’s response was “imprudent” and the ratepayers should not be on the hook for the cost of damages or clean up.
More than 70 percent of the outages in the Northeast occurred in Connecticut, but Connecticut got disproportionately fewer crews, Jepsen said.
Regarding the October snowstorm, Jepsen said they promised to have 99 percent of customers restored by Nov. 6. They were unable to meet that commitment. The false promise may have cost the chief executive of the utility his job, but more importantly it cost consumers confidence, Jepsen said.
“It induced reliance by municipal officials deciding what to do with schools,” Jepsen said. “It induced reliance by businesses who told employees to show up on Monday morning. It induced reliance by consumers making decisions about when to move back to their homes.”
“Putting a price tag on the inconvenience imposed, needlessly on customers and consumers is more difficult and more subjective. The inconvenience was very real none-the-less,” he added.
At least two class action lawsuits have been filed against Connecticut Light & Power by local companies without power for an extended amount of time.