In response to recent statements by Connecticut Natural Gas and Southern Connecticut Gas announcing impending layoffs, state regulators have begun an investigation to see if the job cuts would violate the law.
Energy East, owner of the two utilities, has not specified job cut numbers.
“The plan is still being developed,” spokesman John Dobos said. “There are currently ongoing negotiations with the union.”
However, Attorney General Richard Blumenthal and state Consumer Counsel Mary Healey asked the state Department of Public Utility Control to bar “layoffs of at least 45 employees” until the DPUC decides if the job cuts threaten safety and reliability and/or conflict with recent rate orders.
The reason for both union and non-union job cuts, Energy East CEO Robert Allessio said, is “declining sales, rising healthcare, and pension costs, an increase in uncollectibles, and the overall economic recession.” The only option is layoffs, he said, to offset “expected revenues” and future investments.
“Expected revenues” refers to the DPUC’s June 30 decision rejecting CNG’s request to raise revenues by $7.4 million. Instead the DPUC ordered CNG’s annual revenues reduced by 4.2 percent, or $16.2 million. The DPUC also reduced SCG’s revenues by 3.2 percent. Energy East appealed. Rate cuts will follow unless Energy East wins the appeal.
DPUC Chairman Kevin M. DelGobbo announced that the agency will determine if the job cuts “negatively impact the adequacy and the suitability of the companies to accomplish the duties imposed on them by law and the effect of those reductions on the safety of the public and of their own employees.”
“We will fully cooperate,” Dobos said.
Commissioner Amalia Vazquez Bzdyra, who is leading the investigation, said, “Should the DPUC determine that the workforce reductions impact the ability of the companies to provide safe and reliable utility service, the department may find that the actions in question imperil public safety and require corrective action.
“The department will not hesitate to order changes it finds are reasonably necessary in the public interest,” Bzdyra added.
“Slashing staff is an end run around rate setting. simply to raise profits and executive pay,” Blumenthal said.
Blumenthal also said Allessio has not said the cutbacks would include cuts to his pay — $869,817 last year. Connecticut ratepayers paid $748,480 of that.
“Cuts to executive compensation should come before consumers and workers are sacrificed to prevent profiteering,” Blumenthal said.
