Norwich — Critics of the controversial Kentucky Derby trips hosted by the Connecticut Municipal Electric Energy Cooperative for the past four years have argued that those funds should have been returned to the member utilities to stabilize rates, but Norwich Public Utilities officials said Monday the city utility chooses instead to keep part of CMEEC rate stabilization revenue in CMEEC control for future use.

Norwich Public Utilities has paid CMEEC anywhere from $1.7 million to $3.5 million per month for power consumed by Norwich ratepayers. As a part owner of the cooperative, Norwich also is entitled to receive its share of revenues from CMEEC's earnings through contracts with other non-member entities that is funneled into a CMEEC Margin Fund.

According to CMEEC Executive Director Drew Rankin, that money — except for $400,000 budgeted for the annual Kentuckey Derby trips — is returned to members for rate stabilization.

But NPU General Manager John Bilda said NPU doesn't use all of its portion of the Margin Fund revenue to stabilize or lower rates, choosing instead to keep the funds at CMEEC for future use on what Bilda termed high-risk purchases or one-time needs.

Bilda would not say how much NPU receives back from CMEEC to offset rates charges to Norwich customers.

In an interview with NPU officials Monday to review various financial records, including bills from CMEEC and expense records by NPU leaders for conferences and events, Bilda said it is NPU's decision to retain a large pool of funds at CMEEC rather than apply them to the city-owned utility's budget.

Throughout the fall, CMEEC and member utility officials have insisted that member utility ratepayer or taxpayer funds did not pay for the Derby trips for the past four years. Rankin has said CMEEC used the Margin Fund revenue from contracts with non-member entities such as the sale of power to non-member municipalities in Massachusetts, the Mohegan tribe and to manage hydropower for the Metropolitan District Commission in Hartford.

Rankin has said all but the Kentucky Derby funds — $1.02 million over the past four years, including $342,330 this year — went back to the member utilities, including NPU, for rate stabilization. The Margin Fund was projected to total $5.5 million by the end of 2016.

Bilda said Monday NPU chooses to keep its money in the hands of the energy cooperative to improve the financial standing of the cooperative for a strong bond rating and to keep the money in reserve for one-time “high-risk” expenses.

The last time NPU used a portion of that fund was in the summer of 2015 for a $1 million repair to a jet engine turbine at NPU's Greeneville hydropower generation station, NPU officials said Monday.

Bilda would not provide details of how money NPU has in the Margin Fund revenue that is held at CMEEC, calling it “proprietary” utility information exempt from the state Freedom of Information Act.

Critics of the Kentucky Derby trips have complained that all revenues in the CMEEC Margin Fund should be returned to the member utilities to lower rates, and CMEEC did use public funds for the trips.

CMEEC too has refused to provide accounting figures to show how the Margin Fund revenues are distributed.

NPU customers also pay a fee in their monthly bills for rate stabilization, and that money also is turned over to CMEEC as part of the overall power cost NPU pays to the energy cooperative, Bilda said. When electric rates spike for market or political reasons, that money is used to stabilize bills for customers and shield ratepayers from spikes in their monthly bills. NPU last used those ratepayer dollars was two years ago, Bilda said, as power costs have remained relatively low recently.

Monthly invoices NPU has received from CMEEC from January 2014 through December 2016, released to The Day Monday through a Freedom of Information request, show bottom line bills the city utility pays for power and adjustments made each month for prior month's actual expenses. For example, in a bill dated Dec. 6, 2016, NPU was charged $2.2 million for the previously month, including a “levelizing bill adjustment for prior month” of $68,019.

The highest bill for power in the past two years is dated April 6, 2015, when power costs for March $3.52 million.

NPU also released its own travel expense records Monday for five top administrators' and board members' travel expenses for  the past three years. While there were no "strategic retreats" — as the Kentucky Derby trips were dubbed by CMEEC, NPU covered more than $110,000 in expenses for Bilda, NPU Division Manager Steve Sinko, Energy Efficiency Manager Jeff Brining, Human Resources Director Kerri Kemp and Assistant General Manager Chris LaRose.

Bilda alone attended conferences, annual meetings of three public power boards he serves on — including the American Public Power Association, the Northeast Public Power Association and the electric Sector Coordinating Council — and "legislative rallies" in Washington. Bilda's expense sheets for the three years totaled more than $55,000, but those include some expenses, such as meals and some air travel, by others on the trips.

Destinations ranged from Washington, D.C., to Falmouth, Mass., on Cape Cod to the U.S. Virgin Islands, Santa Fe, N.M., Arlington, Va., and Jackson Hole, Wyo.

LaRose attended conferences in Lake Tahoe, Calif., Cape Cod, Washington, Newport, R.I., and other New England destinations, and Sinko traveled to places that included Austin, Texas, San Diego and San Francisco.

Bilda said it is imperative that senior staff and Board of Public Utilities Commission members attend conferences and workshops to keep up to date on the latest utility issues, regulations and potential changes to state and federal laws governing utilities.

But the NPU budget contains no discernable line items for these travel expenses. Instead, Bilda called it "management decisions" whether to approve requested conferences for officials from each division as each proposal is submitted.

If budgets are tight, power costs unusually high or revenues drop, the utility cuts back on conferences, Bilda said.

 c.bessette@theday.com