Customers serviced by municipally owned electric utilities enjoy lower rates than do customers of large, private utilities. This is made possible, in part, through the utilization of wholesale energy purchasing by a cooperative jointly owned by the state’s municipally owned utilities — the Connecticut Municipal Electric Energy Cooperative, which has its office in Norwich.

CMEEC serves utilities owned by Norwich, Groton, the Borough of Jewett City in Griswold, South and East Norwalk and the City of Norwalk.

CMEEC and the utilities that own it have competitive advantages. They are self-regulated. Free of the rules set by the state’s Public Utilities Regulatory Authority, they can enter into long-term purchase and sale contracts that reduce volatility, deals that are unavailable to private utilities. CMEEC is nonprofit, allowing it to be ratepayer, rather than shareholder, oriented.

The cooperative generates added revenue by selling electricity and services to nonmembers, such as the Mohegan tribe and some Massachusetts municipal utilities. And it manages hydropower systems for the Hartford area Metropolitan District Commission, for example.

It is, says CMEEC Executive Director Drew Rankin, a success story. And arguably it is.

But it is no excuse for creating a slush fund to pay for an outrageously expensive annual junket, which is what has happened, creating serious conflict of interest concerns.

The story is now familiar to Day readers.

CMEEC spent $342,330 treating municipal utility executives, commissioners, invited guests and some current and former local officials to a four-day trip May 5-8 to the Kentucky Derby, some flying on a private jet, most staying at a top hotel, all getting tickets to watch the Derby. The 2016 trip was the fourth annual one, the attendees and the cost growing each year. Most elected leaders in the towns that own the municipal utilities had no clue they were happening. It took reporters to dig up the information.

Rankin and local utility executives have tried to pass off the trips as “strategic retreats.” That insults our collective intelligence.

Norwich Public Utilities General Manager John Bilda, who has gone every year, contends the excursions “did not cost the ratepayers … a dime.”

Money for the trips came from CMEEC’s “Margin Fund,” containing the revenues from those extra sales and service agreements. Last year that amounted to $5.8 million. About $5.4 million of that went to member utilities to offset costs and hold down retail prices. The rest went into the slush fund for the Derby blowout.

That’s a lot of dimes that did not go back to the municipal utilities to help customers. If not used to offset rates, the money could have helped subsidize nonprofits struggling to pay electric bills, provided seed money for solar energy installation on homes, or paid for any number of things more in line with the mission of a municipally owned utility.

As for conflict of interest, the only regulatory authority over CMEEC is its board. But both its chairman, Kenneth Sullivan, also the Jewett City Utility director, and vice chairman, Bilda, have taken the trips. Can you imagine the chairman and vice chairman of the state’s regulatory commission going on a free five-star Derby weekend paid for by Eversource or United Illuminating? Not a gift, of course, but a “strategic retreat” that certainly could not be seen as compromising their objectivity.

It is deeply disappointing that Norwich Mayor Deberey Hinchey participated in the junket. As she sipped mint juleps and dined in the Galt House Hotel’s revolving restaurant, this leader of a city filled with people who struggle to pay their bills had to know something was wrong. Did she really think that was the best use of money generated by a municipally owned cooperative?

Conversely, Groton City Mayor Marian Galbraith, who also chairs the Groton Utilities board but who was kept out of the loop about the trips, is asking the tough questions and demanding answers. Several ethics investigations will likely soon be underway.

State legislators should consider whether these municipal utilities need some level of state oversight after all. And a good look by Attorney General George Jepsen is in order. The whole affair stinks as much as the droppings of a Derby thoroughbred.