Blogs > Power to the People

Following energy issues in the state of Connecticut and beyond.

Thursday, February 24, 2011

Evidence That Some of Us Are No Longer in a Recession

Need any evidence that the recession continues to hit some segments of our economy unequally?

Then check out Northeast Utilities latest earnings report, hot of the presses Thursday afternoon. Hartford-based NU saw its fourth quarter profits increase by 52 percent in 2010, while its full year earnings were up 17.5 percent over 2009.

NU, the parent company of Connecticut Light & Power, said Thursday that it earned $129.3 million or 73 cents per share in the fourth quarter compared to $84.7 million or 48 cents per share during the same period last year. Full year earnings increased from $330 million or $1.91 per share in 2009 to $387.9 million or $2.19 per share last year, company officials said.

"We are pleased with the performance we delivered to our customers and shareholders in 2010," Charles Shivery, NU’s chairman, president and chief executive officer, said in a statement. "Our financial performance improved over 2009 due in part to strong cost controls."

Shivery (who is pictured above) went on to say that the company's impressive earnings performance came even as energy rates paid by customers of NU's subsidiary utilities continued to decrease and at a time when approximately $1 billion was invested in strengthening and expanding its energy infrastructure in Connecticut, Massachusetts and New Hampshire.

Spending that kind of money on infrastructure improvements at a time when energy rates are going down doesn't begin to explain the company's double digit profit increases or why NU's stock hit a 52-week high earlier this month. But since Shivery didn't make himself available for comment so he could offer a more nuanced explanation of the company's performance, the reporting of your humble energy writer will have to do for now.

One reason for the earnings growth is that it came across all of NU's business segments and through all of its subsidiaries.

The company’s distribution and generation segment saw earnings increase by nearly 93 percent from $39.2 million in the final three months of 2009 to $75.5 million during the same period in 2010. During all of 2010, the company earned $206.2 million in that business segment, compared to $159.2 million in 2009.

Yankee Gas Services Co. saw its fourth quarter earnings more than double, bringing in $16.6 million in the fourth quarter of 2010, compared with $5.7 million during the same period in 2009. Full year earnings in 2010 rose nearly 56 percent to $32.7 million, compared with $21 million in 2009.

NU’s earnings were released after the close of trading in U.S. financial markets. Shares of NU’s stock trade on the New York Stock Exchange and closed at $33.17, down 13 cents from the previous day’s trading.

Wednesday, February 9, 2011

Malloy's Awkward Move Toward Consolidation

The news that Gov. Dannel Malloy wants to merge the state's Department of Environmental Protection with the Department of Public Utility Control was delivered late Tuesday afternoon almost as an afterthought.

If Malloy is to succeed as governor and navigate Connecticut through the current economic quagmire, there's no question that it will take some consolidation at the state level. Reducing the size of state government is one way of reducing the state's enormous deficit.

But Malloy's method for unveiling this decision doesn't bode well for what the future holds of the administration, at least as it relates his ability to deliver a key message and sell it to the public.

Malloy's announcement was made via press release at the close of business for state government on Tuesday. There may have been legitimate reasons for making the announcement at that time, but even in today's 24-hour media cycle, such timing makes it difficult to get comprehensive answers about the consolidation plan.

Ben Barnes, Malloy's budget director, was supposedly made available via telephone later in the evening to answer some questions. But Malloy owes it to the public to release news of such an important plan at a time when it can be fully scrutinized in the light of day.

Unless, of course, the Malloy administration doesn't want the plan fully scrutinized at this point. And that may present a problem in trying to sell his plan to folks like Frank Panzarella.

Panzarella, who is an organizer for the ratepayer advocacy group Fight The Hike, said he is "a little leery about this new agency that is being proposed."

"I'd have to see more of the details, but my general feeling is that when you consolidate several agencies into one larger one, something gets lost and falls by the wayside because there aren't enough people to keep track of everything," Panzarella said.

Fight the Hike has supported efforts in the past by some state lawmakers and former Connecticut Attorney General Richard Blumenthal to create a statewide energy authority. Panzarella said the difference between that proposal and what is now being promoted by Malloy is that an energy authority would have been focused solely on energy issues and would have had a needed level of expertise.

"Until I'm shown otherwise, I'm skeptical that Gov. Malloy's proposed agency can achieve that," Panzarella said.

Malloy said in a statement included in Tuesday's announcement that the consolidation "will allow the state to act cohesively in two vitally important and directly related policy areas, particularly in terms of economic development, siting, permitting and other issues."

“Under this new agency, we will better integrate and coordinate our state’s energy and environmental policy in order to strengthen our ability to protect the environment; to clean, conserve and lower the cost of energy; and to set the table for rapid and responsible economic growth.”

The new agency would be called the state Department of Energy and Environmental Protection (DEEP). Malloy said the state’s energy policy will become centralized in the agency through the creation of two new bureaus: the Bureau of Energy Policy and Efficiency and the Bureau of Utilities Control. The Bureau of Energy Policy and Efficiency will be responsible for the development and analysis of energy policy as it affects all of Connecticut’s citizens and businesses through its Division of Energy Policy and Program Development.

The bureau’s Division of Government Energy Management will be responsible for the effective management of energy costs and energy usage by and within state government buildings and facilities. Existing staff from the Office of Policy and Management Energy Unit will be transferred into this bureau.

DEEP’s second energy bureau, the Bureau of Utilities Control, will be formed by transferring the Department of Public Utility Control into the agency. The DPUC will continue to be responsible for conducting management audits of the public service companies as well as scheduling, coordinating, and issuing legal notices, and conducting public hearings and adjudicating all contested cases.

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