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OP-ED | Reckless Profiteering Or Poor Regulation?

by Johnny Williams | Nov 21, 2011 9:24am
(1) Comment | Commenting has expired
Posted to: Opinion

Two days before Halloween, nearly a million people in Connecticut lost power. Contrary to Connecticut Light and Power assertions, this was not due to the natural disaster, but to its reckless profit seeking. CL&P’s resistance to safeguarding the public is a prime example of what Occupy Wall Street (OWS) protestors are criticizing. Though CL&P claims it operates in the best interest of the public, it vigorously resists regulation designed to protect public interest by contending that government oversight hinders its ability to make a profit. News reporting about CL&P’s operations and bottom line after the October Nor’easter suggests it is exaggerating claims regarding government oversight injurious effects.

As an influential and powerful organization, CL&P uses it multi-million-dollar campaign contribution chest to encourage State officials to relax their oversight. This allowed CL&P to reduce its grid maintenance and disaster preparation to a bare medium in order to increase its profit margin. This CL&P’s strategy increased its parent company’s, Northeast Utilities (NU), second-quarter earnings from $72 million last year to $77.3 million this year.

Because political campaigns are funded by private donations, CL&P was able to use its financial resources to support and encourage obsequious politicians and regulators to put private profit before public need. NU’s political action committee (PAC), to which CL&P’s Jeffrey Bulter and other company executives contribute via biweekly payroll deduction, raised $140,000 last year to support candidates representing their corporations’ interest.

According to political blogger George Gombossy, NU’s political payoff of long time Republican Mayor Sebastian Giulliano contributed to his electoral defeat because voters realized his silence about CL&P’s poor response to the power outage was probably the result of campaign contributions he received from NU officials. As Eric Hyer, director of the State Democratic Party put it: “voters are sick of politicians who put their own interests ahead of taxpayers.” What Heyer neglects to mention is that the Democratic Party and its politicians are also participants in elevating CL&P’s profit interest over public need. NU PAC records reveal CL&P’s favorite politician is Fifth District Congressman Chris Murphy who received a maximum of $5000 from NU for the first phase of his 2012 run for Connecticut’s United States Senate. Given these political manipulations, Occupy Hartford’s November 5 march to protest Bank of America’s corporate greed expressed the view that big business like CL&P and its wealthy owners rule not Democrats or Republicans.

CL&P’s poor performance during the power outage suggests that electric utilities provide necessary and vital service to all sectors in Connecticut and should not run as for-profit businesses. To many Occupy Hartford protestors the CL&P debacle and the unaccountable political process that enabled CL&P’s poor response to the aftermath of the nor’easter reaffirms their commitment to provide a focus for expanding spaces of struggle. That is, Occupy Hartford and the OWS movement promise the possibility of a popular activist movement that is, for all practical purposes, a permanent check on efforts by corporations like CL&P to profit at the public’s expense. The OWS movement is committed to public need over private profit unlike State politicians and government regulators who supported CL&P’s request to reduce its work force to help drive up profits and fatten its executives’ pay. This cut in CL&P work force also contributed significantly to its poor response to the storm’s aftermath which left many people crowded in community shelters for over a week.

Now that power has returned, it is reasonable to assume that CL&P will pay for the out-of-state utility personnel it called in to help get its grid running. Way before its disastrous storm response fades from public conscience and to no one’s surprise Jeffrey Butler and CL&P announced Friday, November 11, it will seek a rate hike to pay for grid restoration. Because CL&P’s greed knows no bounds, Occupy Hartford’s participants are committed to organizing events and protests to expose how NU gouges the public using rate hike decisions of their regulatory and political minions as cover.

Johnny Williams is an assistant professor of Sociology at Trinity College

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posted by: ctperson13 | November 22, 2011  8:27am

The response to NU’s request for a rate hike should be no—pure and simple. Take the money from the salaries of overpaid executives. They have not performed well in serving the public. They should take the hit. Simple.