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Tue November 15, 2011
Two Storm Panel May Rethink How Utilities Pay For Infrastructure Costs
The panel looking into the state's response to two damaging storms this year heard from electricity providers today/yesterday. As WNPR's Jeff Cohen reports, the panel want to know what needs to happen to keep the lights on the next time weather strikes. Executives from United Illuminating and Connecticut Light & Power appeared before the panel. Joe McGee is the body's co-chair, and he was particularly interested in two areas of inquiry. First, he wanted to know whether the prospect of fining utilities could prompt them to do more before a storm approaches.
McGee: If a utility knows it's going to be fined, a dramatic fine, and let's say management is also going to pay a penalty, well you know, I may spend more up front. Torgerson: We don't have an issue with spending for it , as long as we're getting cost recovery on it. That's the other part of it. That's James Torgerson of UI. He didn't rule out the idea that fines could be effective. McGee also asked representatives of CL&P this question -- why are utilities paying hundreds of millions of dollars to merely fix an aging infrastructure that likely wouldn't survive another major storm? He says the answer may be in the way that we pay for infrastructure improvements.
As it stands, those improvementsessentially paid for by electric customers in their monthly bills. McGee asked Dana Louth whether that was the best way to do it. McGee: You know how to strengthen the system. I suspect you also know how much it's going to cost us to do that. My question is why has that never been presented to the State of Connecticut? Louth: I think because the likelihood of a large storm is not immediate. McGee: I mean all of the sudden you're sitting here saying do we want to be back here in ten years after a category three storm hits and we say, "Well, gee, it was a lot of money, and, okay, we're only going to be out of power a month?" At what point do you present to us options to strengthen the system which we know is inevitably going to be damaged by extreme weather? Louth: We'd certainly be willing to present those options at any time.
After the utilities were done with their testimony, the panel heard from municipal power companies as well as representatives of the state's cities and towns.