No matter how big your business is, you can’t endure many weeks like the one CL&P had last week.
The final ruling from the state’s Public Utilities Regulatory Authority found CL&P’s response to the twin storms of 2011 to be “deficient and inadequate.” When the smoke clears, that’s a finding that could cost the company as much as $130 million.
The utility had said it wanted ratepayers to pick up $260 million of its estimated $300 million in storm-related costs but the PURA finding will now be part of the calculation when the utility seeks its next rate adjustment. While it’s unclear the extent of the damage to CL&P, it seems clear that it will run into the millions of dollars.
Then there’s the operational threat and the public relations hit of having your linemen marching around Hartford with placards proclaiming ‘Profits first, not customers.’ Now, the linemen have been working without a contract for about two months and they see some possible leverage in CL&P’s battered image. And company officials were quick to dismiss the whole event as a negotiating stunt.
That’s often the way bargaining is done. But this situation is a no-win game. Regulators are already looking askance at the company. The worse CL&P looks, the less money it will likely have to pay for things like raises and benefits. We’ll duck the staffing question for now, assuming, as the state did, that micromanaging isn’t a good policy long-term and CL&P knows its business. But it seems safe to say that employing fewer linemen today than before last year’s storms is a risky policy. One bad storm response could topple this house of cards.
Even the often clueless folks in the CL&P executive suite see the perception problem. That’s why they chose to drop $500,000 into the public kitty for emergency preparedness. Companies can score a PR win with generosity like this. But this grant, coming as it did at the end of four days of state-mandated preparedness drills, comes across as something between tribute to the regulators and a bribe to go easy. Not all problems can be solved with a check.
Our instinct is to cut CL&P some slack. The company is in the midst of a complex corporate merger and such things can sometimes unhinge the decision-making system. Here, it appears more of the decisions are being driven from Boston rather than from Berlin — exactly what parent Northeast Utilities said would not happen. And in this case, distance doesn’t make the heart grow fonder.
Perhaps NU and CL&P officials should pick up on the signal sent by Governor Malloy’s decision to activate the state’s emergency center ahead of a line of thunderstorms that rolled through recently. There’s just no confidence the utility can handle even a summer storm.
Trust is a tricky thing and CL&P has lost the public’s trust.
Figure it out, NU, or the state will have no choice but to micromanage your business. And based on the state’s record of managing details, that’s not going to be a pleasant experience for anyone.
New state woes
State employees, battered and under siege on several fronts, are again proving to be their own worst enemies.
First there was the fiasco in which a number of state employees got caught ‘mistakenly’ applying for storm damage assistance for which they were not entitled. They were fired, then rehired when the state couldn’t make fraud allegations stick.
Now comes news that some state employees may have sticky fingers.
An NBC 30 investigation shows nearly a million dollars’ worth of computers and other electronic gear is unaccounted for and Republicans are taking up the call for a state investigation of loose management practices and possible large-scale theft.
Perhaps the state needs a new motto: Trust but verify.
