Leaders of local municipally owned utilities are expressing strong opposition to a bill proposed by state Sen. Heather Somers, R-Groton, that effectively would eliminate the Connecticut Municipal Electric Energy Cooperative in the wake of controversial lavish trips to the Kentucky Derby and the oversight and ethical issues the trips have raised.

Somers has submitted two companion bills that have been referred to the legislature’s Joint Committee on Energy and Technology: one that would repeal Chapter 101a of the General Statutes — the law that created CMEEC — and a second bill that would allow municipal electric utilities to create “joint purchasing agencies.”

Somers said Wednesday she expected opposition to her bill, but she defended the proposal in reaction to continuing news reports of CMEEC's lavish and excessive spending, as well as its failure to provide detailed financial reports on its profits and excessive spending.

"CMEEC was created under Connecticut General Statutes and was intended to serve a public purpose to provide the most low-cost and reliable source of power to its members," Somers said. "Every day we learn of more excessive spending and missteps. They're an institution that has absolutely lost its way."

Somers’ two bills are among four submitted for the new General Assembly session that relate to the embattled electric energy cooperative, owned by six member municipally owned utilities in the state, including Norwich Public Utilities, Jewett City Utilities and Groton Utilities, which also owns Bozrah Light & Power.

Several Norwich-area legislators have proposed a bill mandating that CMEEC follow state Freedom of Information laws regarding posting of meeting agendas, minutes, financial information and business conducted. And a fourth bill would require CMEEC to disclose detailed financial information to nonmember municipal electric utilities to whom it provides services.

The bills follow a wave of criticism aimed at CMEEC, board members and member utilities for participation in lavish trips to the Kentucky Derby hosted by CMEEC for the past four years. The trips collectively have cost $1.02 million for dozens of participants, including CMEEC board members, staff, family members and municipal leaders throughout the region.

Six ethics complaints are being investigated in Norwich and one in Groton City against municipal officials who attended the trips.

While state legislation created CMEEC, and the member utilities own the cooperative, there has been little to no regulation of the entity, and state utility regulators have no authority over the cooperative or its members, state officials have said. The FBI in late October launched an unspecified investigation into CMEEC and its member utilities, officials at the utilities have confirmed.

Somers said she contacted the state Attorney General's Office this week to ask for an inquiry into CMEEC's actions and financial practices. She specifically asked that the office examine the CMEEC Margin Fund, defined by CMEEC officials as the source of the Kentucky Derby trip. The fund contains revenues from electricity sales to nonmember entities and management fees CMEEC receives from the Metropolitan District Commission.

"I urged them to look at this margin fund," Somers said. "If they’re a nonprofit, why do they have this margin fund? The mission is to serve the ratepayers and the citizens."

She also objected that CMEEC is paying for the attorney to represent four Norwich board members and three Groton board members in ethics complaints filed against their participation in the Derby trips.

"That's why we should have a conversation on whether CMEEC should continue to exist," Somers said of the various issues.

Leaders of Groton and Norwich utilities said Wednesday they plan to speak strongly against any legislative action that would eliminate CMEEC and will instruct their Hartford lobbyists to track the bills.

Groton City Mayor Marian Galbraith, chairwoman of the Groton Utilities Commission, addressed Somers’ bills at both the Groton and Bozrah utilities meetings Wednesday.

Galbraith, herself a critic of CMEEC in the wake of the Kentucky Derby controversy, said eliminating the cooperative is not the answer.

“I am very opposed to legislation that would abolish CMEEC,” Galbraith said at Wednesday’s Groton Utilities Commission meeting. “None of us can deny, Kentucky Derby aside, that CMEEC has been very, very good to the city and our customers.”

Galbraith said the issue was raised at a recent Southeastern Connecticut Council of Governments legislative breakfast, and similar sentiments were expressed that businesses within the municipal utilities’ districts benefit greatly from having lower electric rates.

Groton Utilities Director Ron Gaudet told the commission Wednesday that the current Groton residential electric rate is 20 percent lower than Eversource residential rates.

Groton Utilities also is working with CMEEC on two important so-called micro-grid projects that would use existing CMEEC-owned diesel generators in the city to ensure major commercial and service districts would retain electricity during a prolonged power outage.

“We have to talk about the value to our community,” Galbraith said. “It doesn’t mean we can’t change things. We have to talk about the greater good.”

NPU General Manager John Bilda, vice chairman of the CMEEC board of directors, expressed similar objections Wednesday.

“We will be opposing it,” Bilda said of the bill. “We have people in Hartford (tracking the bill). Doing away with CMEEC would only cost the consumers lots and lots of money.”

Bilda did not have current comparison rate figures, but said overall, NPU rates have averaged 10 percent below investor-owned utilities’ retail rates on an annual average for customers using 700 kilowatt hours of electricity per month.

Tony Sheridan, president and CEO of the Chamber of Commerce of Eastern Connecticut, said the issue also was discussed at a chamber board meeting earlier this week. CMEEC Executive Director Drew Rankin is a chamber board member.

Rankin was not available to comment Wednesday. A “legislative overview” is listed on the agenda for CMEEC’s board meeting at 10 a.m. Thursday in Norwich.

“The decision to spend money to go to Kentucky aside, the value of CMEEC for the region’s participants — Groton, Norwich, Bozrah and other communities, is that they have the privilege of lower rates. It does incredibly important work for the entire region, including the (Naval Submarine Base).”

Sheridan said anyone considering the bill should examine the lower utility rates first.

“It’s a huge plus for this region, at least for those communities who are engaged with CMEEC.”

c.bessette@theday.com