Norwich utilities commissioners get overview of CMEEC

Norwich — Without mention of recent controversies over retreats to the Kentucky Derby or objections to a new state law strengthening state and municipal oversight, Connecticut Municipal Electric Energy Cooperative CEO Drew Rankin on Wednesday provided the Norwich utilities commission with an overview of the regional energy cooperative's business and financial structure.

The 45-minute overview was one of several presentations the Board of Public Utilities Commissioners has heard in recent meetings designed to educate three new board members on the utility's functions. The board will take a tour of NPU facilities next Tuesday, NPU General Manager John Bilda said.

The controversy over lavish trips hosted and paid for by CMEEC for dozens of board members, staff and officials from the member towns from 2013 through 2016 to the Kentucky Derby has dominated discussions about the utility for the past several months and led to the resignation of the commission's former chairwoman and vice chairman, both of whom served as NPU members on the CMEEC board of directors. The NPU board now must appoint two new members to the CMEEC board.

Chairwoman Grace Jones said Wednesday she was unsure whether those appointments would be made at the Aug. 22 board meeting. In October, the Norwich City Council also will get to appoint a member directly to the CMEEC board. A new state law enacted in response to the Kentucky Derby controversy calls for the governing bodies of the six member municipalities that own CMEEC to appoint members to the board of directors and calls for a forensic audit of CMEEC finances over the past five years, covering the period of the derby trips and other out-of-state retreats.

During his presentation Wednesday, Rankin explained that CMEEC's ownership percentages change each year based on electricity loads in the individual utilities. Currently, Groton Utilities has the largest share at 39.5 percent. NPU currently owns 27.7 percent of CMEEC. Bozrah Light & Power, owned by Groton Utilities, owns 17.5 percent; South Norwalk Electric & Water, 7.9 percent; Third Taxing District in Norwalk, 5.3 percent, and Jewett City Department of Public Utilities, 2 percent.

But votes on the CMEEC board are not weighted by ownership, Rankin said. Members have the ability to call for a weighted vote, but the move must be supported by a majority of the owners and cannot be forced by the larger owners.

CMEEC also provides wholesale energy or management services to nonmember entities, including providing wholesale energy to the Mohegan Tribal Utility Authority, since 1995.

Rankin said CMEEC has set a goal to provide members with wholesale power at a cost over a three-year average that is 35 percent lower than the so-called regional benchmark of investor-owned utilities wholesale rates, for a $200 million savings collectively over the three-year period. By 2021, the cooperative hopes to raise that savings to 40 percent, which would amount to a $300 million savings collectively for members over a three-year period.

The target goal called for being at 35 percent below the cost of private utility wholesale energy by 2018, but Rankin said the numbers have been falling short of the goal thus far this year. Through May, CMEEC's wholesale cost is 30 percent lower than privately owned utilities and should end the year at that level, with an overall comparative savings of $160 million to its members.

He said CMEEC hopes to “close that gap” next year, possibly with finding new customers and added revenues.


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