Conn. AG seeks 'meaningful penalties' for utility over storm response

Jessica M. Karmasek Jun. 14, 2012, 3:30pm


HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General George Jepsen says Connecticut Light & Power Co., the company at the center of an investigation over prolonged power outages, was "imprudent" in its preparation for and response to Tropical Storm Irene and an October snow storm last year.

In a brief filed Monday in the state Public Utilities Regulatory Authority's investigation into the utility's responses to the two storms, the attorney general said CL&P should face "meaningful" penalties.

In Connecticut, electric and telephone companies share the responsibility of maintaining utility poles to carry their various service lines to customers.

"CL&P failed to prepare for major weather events, failed in its assessments and failed to adequately communicate with the public and public officials," Jepsen said. "The company's 'worst-case scenario' emergency response plan only prepared for 100,000 power outages; they had no plan whatsoever for outages on the scale that we saw not once in 2011, but twice."

Tropical Storm Irene hit the state on Aug. 27-28, 2011 and the snow storm on Oct. 29, 2011.

At the height of the October storm -- of which heavy, wet snow weighed down trees and branches, causing much of the outages -- about 3 million Northeast residents lost power.

Almost two weeks later, thousands in Connecticut were still without electricity.

Jepsen continued, "Connecticut residents and businesses were left stranded in the wake of two of the largest storm-related power outages to ever affect our state because of CL&P's failures. Any costs related to CL&P's imprudence should in no way be passed on to ratepayers."

The attorney general is asking that regulators not allow recovery of any storm-related costs that resulted from the utility's "imprudent conduct."

In addition, he is calling for PURA to disallow the recovery from ratepayers of a substantial portion -- in the range of 30 to 50 percent -- of CL&P's 2011 storm restoration and recovery costs.

This penalty fairly reflects the cumulative effects of CL&P's imprudence in its preparations for and management of these storms, Jepsen said.

As an alternative to the recovery disallowance, the attorney general said PURA should consider reducing CL&P's return on equity in a future ratemaking proceeding -- both as a penalty and as a "strong warning" to the company to improve its management practices.

Given the magnitude of the company's mismanagement, if imposed in CL&P's next rate proceeding, the penalty should be large enough to be "meaningful" and "sufficient" to reflect the full extent of its failures in the 2011 storms, Jepsen said.

"This investigation gives us the opportunity to reverse a trend of mismanagement and unpreparedness in our utility companies," he said Monday.

"In the case of CL&P, I firmly believe that those penalties must be large enough to be meaningful and to strongly incentivize the company to improve its performance."

According to Jepsen's office, Irene caused more than 700,000 customers to lose power, some for as long as nine days.

The October snow storm, meanwhile, interrupted electric service to more than 800,000 Connecticut residents, many for as long as 11 days.

From Legal Newsline: Reach Jessica Karmasek by email at

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