Blogs > Power to the People

Following energy issues in the state of Connecticut and beyond.

Friday, December 11, 2009

An Ulterior Motive

I confess that when officials of Connecticut Light & Power trotted out a study last month, produced by two Eastern Connecticut Connecticut University economists, saying that the utility "is a linchpin organization” in the state's economic growth, my private reaction to the report was more suitable for a teenager than a 49-year-old journalist.

"Well, duh, yeah," the inarticulate inner me said to myself about the study, which CL&P's corporate parent, Northeast Utilities, paid for with a $23,000 grant from its shareholders. "Tell me something I don't already."

After having fought the urge to open my mouth and say that, I asked CL&P officials if the study had any other purpose than to quantify the company's value with the state. Jeff Butler, CL&P's president insisted that the purpose of having the study done was "to educate people to the value of what this company brings to the state of Connecticut."

"The part that most people haven’t had a full understanding of before is we have a much broader impact," said Butler (who is shown at left).

David Cadden, a management professor at the School of Business at Quinnipiac University and frequent source in my stories, begged to differ. He told me that typically, the release of an economic impact report like this one comes with a corporate agenda behind it.

And just as Cadden said it would, that agenda surfaced on Wednesday.

Large portions of the ECSU study were included in a media briefing given to Connecticut journalists as CL&P announced that it will file a $210 million rate increase in January. If state utility regulators approve the rate increase on the distribution portion, it would take effect next July 1, but that CL&P would not begin collecting it until the start of 2011.

The money would be collected over an 18-month period and CL&P could not request another increase in distribution rates until July 2012, if the Connecticut Department of Public Utility Control approves the plan. But the timing of the utility’s plan would wipe out the 5 percent decrease in the distribution portion of customers’ bills.

That decrease is supposed to occur as bonds that come under the competitive transition assessment on CL&P customers’ electric bills are paid off.

At this point, I'm not going to address the company's justification for the proposed rate hike, which is that it needs the money to upgrade its aging distribution network. There will be plenty of time to debate that once the company actually files its rate case with the DPUC.

But I do think it was a little disingenuous of the company to insist it didn't have an ulterior motive for developing this study.

No, CL&P didn't do anything wrong, anything illegal. But to my way of thinking, if you want your customers to think of you as good corporate citizen, you should try to be as transparent with them as you possibly can.

There's nothing wrong with CL&P using the study to build its case for approval of the rate hike before the DPUC. The regulatory agency operates like a quasi-judicial body and makes its decisions based on facts that are presented to it.

But in the court of public opinion, the way the release of this study was handled seems like an effort to soften the blow the company clearly expects to its image with customers will take as the rate hike case plays out while the recession drags on.


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