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Following energy issues in the state of Connecticut and beyond.

Friday, December 3, 2010

Lawsuit Against State Utility Regulators to be Heard on Monday in Superior Court

A Superior Court Judge in New Britain on Monday is expected to hear the merits of a citizen lawsuit against a plan approved by state lawmakers earlier this year to borrow against money collected on customers electric bills.

Judge Patty Jenkins Pittman will hear arguments from State Senator-elect Joe Markley (shown at left) that borrowing against the Competitive Transition Assessment (CTA) charge on customers electric bills amounts to a hidden tax. The CTA was created to pay for costs associated with Connecticut’s 10-year old deregulation of the electric industry

Markley, who is from Southington and was elected in November to represent the state’s 16th Senate District, filed the lawsuit earlier this year against the Department of Public Utility Control (DPUC). The DPUC has jurisdiction over the charges that appear on customers’ electric bills.

"The DPUC is not a taxing authority," Markley said "What we’re dealing with now is a tax to bridge the gap in the current state budget. It has nothing to do with the electric companies any more."

The CTA was a charge to help the state’s dominant power providers, The United Illuminating Co. and Connecticut Light & Power, recover so-called "stranded cost" when they were forced under the deregulation law to sell off their power plants under the state’s deregulation law.

Stranded costs are expenses the companies incurred, with DPUC approval, whose continued recovery was jeopardized by the law that allowed customers to choose their electric supplier.
The CTA is scheduled to end when those stranded costs are paid off. That was supposed to happen this year for CL&P and in 2013 for UI.

But because the state lawmakers voted to borrow against the money collected through the CTA, "we’re now in the position of having to pay over a number of years for money that has essentially already been spent," Markley said.

"It’s a very poor precedent," Markley said. "I want clarity and transparency in government."

Joining Markley in court on Monday will be Paula Panzarella, who is representing the New Haven-based group, Fight the Hike. Panzarella has filed a motion to join as a plaintiff in Markley’s lawsuit.

"Electric rates in Connecticut are the highest in the continental United States," Panzarella said. "Customers were to get a modicum of relief when the CTA expired. Instead, the legislature renamed the charge Economic Revenue Recovery Bonds (ERRB) and decided to use the fee to cover borrowing."

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