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Following energy issues in the state of Connecticut and beyond.

Wednesday, May 20, 2009

Another showdown at the UI Corral?

The last time New Haven Mayor John DeStefano staged a press conference in front of United Illuminating's headquarters at the Connecticut Financial Center, the May 8th event yielded some high drama for even the most cynical folks in the media.

The utility's two top executives - James P. Torgerson, president and chief executive officer of UIL Holdings Corp., UI's corporate parent, and Anthony Vallillo, president of New Haven-based company - came outside to square off with Hizzoner in a verbal slugfest on the sidewalk just a few steps down Church Street from City Hall. The subject: UI's proposed relocation of its headquarters to Orange in 2012 when the company's lease at the Connecticut Financial Center is set to expire.

Most press events are highly scripted affairs. But the angry words that DeStefano traded with the utility executives were raw and real, right down to the Mayor's criticizing the type of car - a Jaguar - Vallillo allegedly drives.

Could a replay of that highly charged confrontation be in the offing for Wednesday?

DeStefano and Connecticut Attorney General Richard Blumenthal have called a 12:30 p.m. press conference in front of UI headquarters to release information concerning the cost of United Illuminating’s move to Orange.

The mayor and Blumenthal are turning up the pressure on UI, which just abandoned its efforts before the Connecticut Department of Public Utility Control to get a higher return on equity than the regulatory agency granted the company in February.

But even as the company was abandoning its efforts to get the DPUC to consider raising its return on equity, it was also announcing that it was a launching a registered public stock offering. UI will sell 4 million shares in the public offering and will also sell 600,000 shares to investment banks and other companies.

But in launching the stock offering, UI seems to have contradicted claims made before the DPUC last week that it need a higher return on equity to attract outside investment it wasn't capable of getting with the lower rate. UI used that alleged lack of interest in the company's stock to justify deferring $60 million in infrastructure improvements and repairs.

That same stock offering will likely prevent a public rematch between DeStefano and the two UI executives.

Federal securities regulators require a "quiet period" leading up to stock offerings, which essentially prohibits company officials from doing or saying anything that might possibly mislead investors about its prospects.
So DeStefano and Blumenthal - who on Tuesday pressed the DPUC for a full scale investigation into UI's operations - will get a few free shots in at the company at Wednesday's event.

Since DeStefano seems determined to contrast what he perceives as the company's hubris and greed with the tough time that ratepayers - particularly those in New Haven - are having trying to make ends meet, here's a free suggestion for the mayor.

Give the proposed UI headquarters a catchy moniker, one that the media might even pick up on.

DeStefano is capable of coming up with one on his own, but for the sake of discussion, here are three that I've come up with:

- "The Crystal Palace in the Cornfield"

- "Torgerson's Taj Mahal"

- "Vallillo's Versailles"

Of course adopting such a strategy would do nothing to further the debate about what unquestionably is an important public issue.

But then, reasoned discourse has already taken a back seat to this political street theater in which the goal is not compromise and come up with a solution to the problem at hand, but rather to make your opponent look bad in public.

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