CMEEC will have to meet new post-Kentucky Derby requirements beginning next month

Victor Espinoza rides American Pharoah to victory in the 141st running of the Kentucky Derby horse race at Churchill Downs on May 2, 2015, in Louisville, Ky. Changes in Connecticut Municipal Electric Energy Cooperative management go into effect Oct. 1 after public outcry that the obscure agency had stepped out of bounds by hosting all-expenses paid trips to the Kentucky Derby from 2013 to 2016 for dozens of staff, board members, their spouses and other family members and municipal leaders. (AP Photo/David J. Phillip)
Victor Espinoza rides American Pharoah to victory in the 141st running of the Kentucky Derby horse race at Churchill Downs on May 2, 2015, in Louisville, Ky. Changes in Connecticut Municipal Electric Energy Cooperative management go into effect Oct. 1 after public outcry that the obscure agency had stepped out of bounds by hosting all-expenses paid trips to the Kentucky Derby from 2013 to 2016 for dozens of staff, board members, their spouses and other family members and municipal leaders. (AP Photo/David J. Phillip)

The governing board of the Connecticut Municipal Electric Energy Cooperative will look different in the coming weeks, as a state law that takes effect Oct. 1 will allow member municipalities to appoint a ratepayer representative to the board that procures wholesale electricity for four local member utilities.

The legislature last spring approved changes to the 1975 law that allowed municipal electric utilities to create cooperatives to improve their purchasing power, with voting members representing the utilities. CMEEC, created in 1976, currently is owned by six municipal utilities: Norwich Public Utilities; Jewett City Department of Public Utilities; Groton Utilities; Bozrah Light & Power, which is owned by Groton Utilities; Norwalk Third Taxing District; and South Norwalk Electric and Water.

The changes came in response to public outcry that the obscure agency had stepped out of bounds by hosting all-expenses-paid trips to the Kentucky Derby from 2013 to 2016 for dozens of staff, board members, their spouses and other family members and municipal leaders. The trips cost a combined total of $1.02 million.

For years, the cooperative operated behind the scenes, negotiating wholesale power purchases, handling highly technical matters, expanding to solar generation and micro-generating plants that ensure key areas have backup power during emergencies and contracting with outside entities for some services.

The law now gives municipal leaders – city councils, boards of selectmen and the Board of Burgesses for Jewett City – direct appointees to the CMEEC board. It also orders a forensic audit of the cooperative’s past five years of finances, orders CMEEC to provide annual financial reports, including a list of staff and salaries, and creates a municipal electric consumer advocate in the state office of Consumer Counsel.

Although the Kentucky Derby scandal has received frequent media attention for the past year, including ethics violations findings in Norwich and Groton City, not all municipal leaders were aware of the new appointment coming their way.

State Sen. Heather Somers, R-Groton, who led the effort for stricter state oversight of CMEEC, sent letters last week to elected leaders in the five member municipalities describing the new ratepayer appointment. She sent a letter to CMEEC board Chairman Kenneth Sullivan outlining CMEEC's responsibilities under the law.

Somers said she also has been in touch with state Consumer Counsel Elin Swanson Katz on the state's new municipal advocate position. The law gives that position a budget of $70,000 in the first year, with $50,000 in following years to be paid for by “all municipal electric energy cooperatives.” CMEEC currently is the only such cooperative.

In her letters to the municipal leaders, Somers included a summary of the new law and the restrictions on the ratepayer representative to CMEEC. The person must be a residential or commercial ratepayer in the member utility and cannot work for the utility, the municipality or for any other CMEEC member utility or municipality. The person also can’t be a CMEEC employee.

Groton City appeared to be furthest along in making the new appointment. The City Council received a draft ordinance at its Sept. 5 meeting that outlines the state law, describes the ratepayer appointee and making it a three-year term. Mayor Keith Hedrick said the City Council will vote on the ordinance at its Oct. 2 meeting.

“We will not only address the ratepayer (appointment), but all of our appointees to CMEEC, regular and alternate,” Hedrick said, “and address the requirement for the ratepayer representative.”

Groton’s ordinance cites the state law provision that the new ratepayer representative be paid by CMEEC the meeting stipends called for in the CMEEC bylaws. Board members attending at least 65 percent of meetings receive $600 per meeting attended in person, $200 for phone or electronic participation, $250 for committee meetings, and $100 for committee meetings by phone.

“Ratepayer representative may take the stipend or have it deposited into the utility rate stabilization fund by their preference,” the Groton City draft ordinance states.

Hedrick, chairman of the city utility commission, said he has “put feelers out” for possible interested ratepayers. As with all boards and commissions, applicants would submit résumés, qualifications and statements on why they want to serve. Hedrick hopes to have an appointee sometime in October.

“I’m wrestling with the idea whether I want a residential or a commercial representative,” Hedrick said. “One of the challenges is whether the person can make the meetings, because the meetings are during the day.”

That last condition is what concerns Bozrah First Selectman Glenn Pianka.

“It’s going to be difficult,” Pianka said. “It’s difficult already to find volunteers for boards and commissions in town.”

Pianka said he was unaware of the new town-appointed CMEEC representative and welcomed Somers’ reminder and summary of the law. The Board of Selectmen will discuss it at its Oct. 17 meeting, he said.

Jewett City Warden Alan Geer also was unfamiliar with the new appointment and time frame. He said he will review the provision in the law and bring the issue to the Board of Burgesses at its Oct. 2 meeting.

The Norwich City Council has a three-member appointments/reappointments committee that will take up the issue. Committee member Council President Pro Tempore Peter Nystrom said he will ask city Corporation Counsel Michael Driscoll to help write a position description with all the restrictions. Democratic Alderman and committee member H. Tucker Braddock said he has “reached out” to a couple of possible applicants he believes are “above the fray” of the recent controversy and city politics.

“I feel it’s a good thing to have someone totally independent of the NPU and CMEEC,” Braddock said. “I want someone who has some business experience, accounting experience, can look at legal papers and look at the legality of what these issues can be. And someone who can coalesce to make the board work more favorably.”

Nystrom said the committee could have a recommendation to the full City Council at the Oct. 16 meeting.

“You want a fresh set of eyes, someone who can articulate what’s going on,” Nystrom said. “Communication is very important with this board. I would welcome them at council meetings, where the public can see them as well.”

The timing of the appointments could put at least some of the ratepayer representatives onto the CMEEC board in time for the annual meeting in November, when the operating budget is reviewed and approved.

CMEEC officials have released only a six-page summary of the 2017 budget approved last November, including only two pages covering its $13.6 million non-fuel operating expenses – with no breakdown for the $3.9 million in salaries, $4.2 million for operations and management and $602,700 “miscellaneous and general” costs.

On Sept. 13, the state Freedom of Information Commission ordered the agency to release its 2017 operating budget to The Day in response to an FOI complaint. CMEEC General Counsel Robin Kipnis said last week the request for detailed breakdowns of the agency’s spending line items is being processed.

The new state law calls for CMEEC to report annually to the General Assembly’s Energy and Technology Committee on the five-year forensic audit, annual reports and “a report listing the position of each employee and the amount of the salary, wages and fringe benefit expenses paid to such employee.”

c.bessette@theday.com

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