Connecticut Attorney General George Jepsen is calling on state regulators to impose "meaningful penalties" on CL&P, calling the utility's response to two major storms last year inadequate and "imprudent."
“Connecticut residents and businesses were left stranded in the wake of two of the largest storm-related power outages to ever affect our state because of CL&P’s failures," Jepsen said. "Any costs related to CL&P’s imprudence should in no way be passed on to ratepayers.
“CL&P failed to prepare for major weather events, failed in its assessments and failed to adequately communicate with the public and public officials. 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.”
CL&P, he said, was imprudent in its preparation for and response to Tropical Storm Irene in August and the October Nor’easter and should face meaningful penalties, Jepsen said in a brief filed today in the Connecticut Public Utilities Regulatory Authority (PURA) investigation into utility companies’ responses to the two storms.
Jepsen is calling on regulators to disallow recovery of any storm-related costs that resulted from CL&P’s response and he is calling for PURA to disallow the recovery from ratepayers of a substantial portion, in the range of 30 to 50 percent, of CL&P’s 2011 storm restoration and recovery costs. This penalty fairly reflects the cumulative effects of CL&P’s imprudence in its preparations for and management of these storms, the he said.
Jepsen said PURA should consider reducing CL&P’s return on equity (ROE) in a future ratemaking proceeding – both as a penalty and as a strong warning to the company to improve its management practices. Given the magnitude of the company’s mismanagement, if imposed in CL&P’s next rate proceeding, the penalty should be large enough to be meaningful and sufficient to reflect the full extent of CL&P’s failures in the 2011 storms, the Attorney General said.
“This investigation gives us the opportunity to reverse a trend of mismanagement and unpreparedness in our utility companies,” he said. “In the case of CL&P, I firmly believe that those penalties must be large enough to be meaningful and to strongly incentivize the company to improve its performance.”
According the brief, evidence presented in the case reveals that CL&P was imprudent with regard to its:
- Inadequate preparation for major storms,
- Failure to request the assistance of outside crews in a timely manner,
- Unreasonable damage assessment process,
- Failure to train and support municipal liaisons and defer to local restoration priorities,
- Unreasonable development of estimated restoration times, and
- Mismanagement of communications with the public and public officials concerning
estimated restoration times.
Tropical Storm Irene caused more than 700,000 customers to lose power, some for as long as nine days. The Nor’easter interrupted electric service to more than 800,000 Connecticut residents, many for as long as 11 days.
Assistant Attorneys General Michael C. Wertheimer and John S. Wright, with Associate Attorney General Joseph Rubin, are handling this matter for the Attorney General.