Somers right to keep heat on CMEEC
State Sen. Heather Somers deserves recognition for leading the charge in getting legislation approved in 2017 that has helped expose the extent of corruption at the Connecticut Municipal Electric Energy Cooperative and added oversight that reduces the chances of future abuses.
Two of the municipal utilities that co-own the cooperative, which has the stated mission of benefitting ratepayers, are located within the Republican senator’s 18th District — Groton Public Utilities and the Jewett City Department of Public Utilities in the Town of Griswold. The other utilities are Norwich Public Utilities, Bozrah Light & Power and two Norwalk-based utilities.
The 2017 legislation subjected the electric energy cooperative to a forensic audit that further confirmed a culture in which revenues secured by the agency were at times utilized as a slush fund to pay for golf outings, live bands, massages and food and gift certificates at employee parties. That legislation also created a position of consumer advocate to serve as an internal watchdog. In that capacity Bill Kowalski has played a major role in assuring the selection of an independent auditing firm, reforming the bylaws and improving transparency.
Attention turned to the cooperative, which previously operated in relative obscurity, when news reports in 2016 disclosed that extravagant excursions for Kentucky Derby weekend had become an annual indulgence during which CMEEC executives, board members from the member utilities, and select family and friends indulged in five-star treatment, fully paid by the cooperative. Added together, the trips cost in excess of $1 million.
It was in response to those reports that Somers and other state lawmakers acted to address the abuses.
Somers is now pushing for the legislature to take further steps, but we would caution the senator and lawmakers not to move past tighter controls to retribution, and in the process damage the cooperative’s ability to save ratepayers money.
There are things to like in the latest legislation, which Somers advocated for in her March 5 appearance in front of the General Assembly’s Energy and Technology Committee. She is not a member of the committee.
The bill would require annual state audits of CMEEC finances. This would be a smart bulwark against the possibility of backsliding.
It would assure that the consumer advocate is properly compensated by CMEEC and has the tools to do his job. The salary, which under the original legislation was set to drop from $70,000 to $50,000, envisioning a phasing out of the role, would remain at $70,000. Additionally, the legislation asks that CMEEC provide the advocate up to $30,000 to employ outside consultants to help him understand the complexities of power contracts and rate structures. Our expectation is that Kowalski, or whoever later fills the role, would not expend that money unless necessary.
But language that would limit the cooperative’s ability to go beyond its primary role of negotiating electric power purchasing contracts for its member municipal utilities appears a step too far. CMEEC’s capacity to sign utility management contracts and invest in solar, fuel cell and micro-generation power production creates an added source of revenue that can benefit ratepayers, if used correctly.
True, it was some of these nontraditional revenues that were tapped to pay for the illegitimate junkets. But with changes in leadership, bylaw protections, the existence of regular audits and the presence of a consumer advocate, such abuses should not reoccur.
The bill would also require CMEEC to implement the recommendations of the forensic audit. Instead the law should require the agency to either implement the recommendations or explain in writing why it is not in the interest of the cooperative and ratepayers to do so. There may be good reasons that a recommendation, though well intentioned, is not prudent. The CMEEC board is reviewing the lengthy forensic audit, issued in December.
The seriousness of the misconduct at CMEEC became clear last year when former board chairman James Sullivan of Norwich, CMEEC CEO Drew Rankin (now on leave pending results of an internal investigation), Chief Financial Officer Edward Pryor, former Norwich Public Utilities General Manager John Bilda and former Groton board member Edward DeMuzzio were indicted in November on federal corruption charges.
Because they are considered indemnified, CMEEC is paying the defendants’ legal fees. Language in the bill would require the cooperative to claw back those legal costs from any official found guilty. That provision should remain in the bill.
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