Lawmakers Propose Storm Rebates From Utilities

On the same day that Northeast Utilities apologized for its performance in addressing outages from the October snowstorm and promising $10 million to the state, several lawmakers are proposing levying penalties against utilities, as well as requiring customer rebates and imposing new standards.  

House Speaker Christopher G. Donovan, D-Meriden, Senate President Pro Tem Donald E. Williams, Jr., D-Brooklyn, and Energy and Technology Chairs Rep. Vickie O. Nardello, D-Prospect, and Sen. John Fonfara D-Hartford, announced several measures designed to hold utility companies accountable to consumers for their performance before, during and after natural disasters.

The Democratic leaders said initiatives would include requesting financial compensation for customers, directing the state Public Utilities Regulatory Authority (PURA) to expand the current storm docket to establish performance standards for utilities, with fines for non-compliance, and in addition request an in-depth, independent audit of all utility companies' storm performance.

They said they would direct the legislature's Energy and Technology Committee to hold hearings to begin to develop draft legislation for consideration by the General Assembly.

On Tuesday morning, Senator Williams met with a legislative liaison from CL&P and asked that CL&P create a "Family and Business Hardship Account" that would offer some form of rebate on future electric bills to any of the estimated 830,000 CL&P residential and business customers who went without power for more than 48 hours following October's snowstorm.

Earlier today, CL&P offered $10 million for such a fund, a figure Senator Williams characterized as "inadequate." He said a much fairer figure would be a $50 credit for each affected customer, which would cost CL&P $41.5 million, or about 10.7 percent of CL&P's $388 million in earnings in 2010. CL&P serves a total of 1.2 million customers in 149

Connecticut cities and towns. “I understand the storm was not CL&P's fault, but CL&P has admitted that their response could have been better," Sen. Williams said. "Homeowners and businesses lost an untold fortune in spoiled food and missed business, as well as covering the cost of hotel stays, take-out meals, flooded basements and a myriad of other, unnecessary daily expenses. CL&P needs to do right by its customers and work out a fair and just compensation plan that can be applied to future electric bills."

"We must be prepared for the next storm emergency. It is clear that our utilities, and CL&P specifically, are not prepared at the present time," Donovan said. "When health and safety are threatened, and when business is disrupted to the extent it has been, we need answers. There are actions we can take legislatively that can make our public utilities more accountable to their customers, and if they fail to do so, there should be consequences."

To that end, over the next several weeks the Energy Committee will accept and review legislative proposals from Democrats, Republicans, the Malloy Administration, Attorney General George Jepsen and others which, in the near term, could ameliorate the impact of future storms, both in terms of personal expense and public safety.

Last week, Speaker Donovan and Rep. Nardello said they would introduce legislation that would direct PURA to create standards of acceptable performance for utility companies. Failure to meet those standards would result in significant penalties for the utilities, with fines paid by shareholders, not customers, and refunded to the customers.

Additional proposals have been offered that would:

• Require gasoline stations and housing complexes for the elderly have generators.
• Provide for a one-time personal income tax credit in the amount of state hotel occupancy taxes paid by Connecticut residents as a result of hotel stays during the snowstorm or Tropical Storm Irene power outages.
• Expand Connecticut's price-gouging bill to cover the cost of lodging and the sale of power generators.
• Require utilities to train and maintain emergency "stand-by crews'' made up of first responder personnel, retired utility workers as well as local responders such as firefighters.
• Require Mutual Aid agreements to specify strict timelines with other utilities and states.
• Increase the use of fuel cells in Connecticut to provide more electricity that is "off the grid.''

The Energy and Technology Committee will also evaluate solutions generated by the Executive Branch forwarded by Gov. Malloy and Attorney General Jepsen, as well as the results of an in-depth audit of CL&P.

"It is time to reassess Connecticut's weather related predictive capability, storm preparation, and ability to expeditiously restore power and utility service," said Rep. Nardello. "We need a detailed review and independent assessment to set reasonable standards of service and improve the communication between individual customers, state and local officials and utility company managers with the authority to influence crews on the ground in conducting and reporting on restoration efforts."

"The storms over the last two months have taught us that our utilities and oversight agencies must be better prepared for major outages. In the near term, we should undertake initiatives such as a tree trimming blitz in key high load areas and critical customer locations, such as nursing homes, gas stations, town facilities and schools. We should also aim to replace bare electric wire in these areas with covered wire, which can reduce power outages by a third to a half. Other near term measures could include training of non-utility contractors to assess outages,freeing all utility linemen to begin repair work immediately," said Sen. Fonfara. "Over the long term, we can promote distributed generation andenergy survival packages though the PACE program, at no additional cost

to ratepayers, to keep furnaces, water pumps, refrigerators and minimal lighting going during an outage."

The Energy Committee co-chairs will recommend in a letter that PURA establish performance benchmarks and order an independent audit by a firm with experience in electric company management. PURA will then issue a findings report to the General Assembly, which at a minimum, include recommendations on:

• Setting minimum staffing levels for power restoration crews and reciprocal contracts with independent and out of state crews.

• Developing communication protocols with state and local officials and emergency operation center commanders and geographical mapping technology to provide restoration status to state and local officials and the public.
• Establishing procedures where PURA directly monitors the effectiveness of coordination and emergency related protocols.
• Assessing Connecticut's tree trimming policy and require utilities to submit to towns a list of all trees impeding lines on public and private property.
• Holding utility companies and executives accountable by tying compensation, penalties, customer rebates and reimbursement for food losses after long outages to performance metrics.